About this Canadian Mortgage
Mortgages in Canada operate differently than in the US. By law, fixed-rate mortgages in Canada must be compounded semi-annually (twice a year), not monthly. This slightly lowers the effective interest rate compared to monthly compounding.
How to use this calculator
- Enter the Mortgage Amount.
- Enter the Interest Rate.
- Select the Amortization Period (max 25 years for insured loans, 30 for uninsured).
- Choose a Payment Frequency (Accelerated Bi-Weekly can save thousands).
Accuracy and testing
Review formula sources, default test cases, assumptions, unit handling, rounding rules, and changelog for this calculator.
How this calculator works
Inputs explained
Amortization
The total time to pay off the mortgage. Typical max is 25 years for high-ratio (insured) loans.
Payment Frequency
Accelerated Bi-Weekly payments help you pay off the mortgage faster by making one extra month's worth of payments per year compared to standard monthly.
Understanding your results
Example scenarios
Standard Monthly
$400k at 5% for 25 years. Monthly Payment: ~$2,326.
Accelerated Savings
Same loan with Accelerated Bi-Weekly payments: ~$1,163 every 2 weeks. You pay off the loan roughly 3-4 years earlier.
Key Features
- Semi-Annual Compounding Logic
- Accelerated Bi-Weekly Support
- Effective Rate Display
Things to Keep in Mind
Does not calculate CMHC insurance premiums automatically. You should add the premium to the Mortgage Amount if applicable.
Tips & Best Practices
- In Canada, mortgage interest is generally NOT tax-deductible for primary residences (unlike the US).
- CMHC Insurance is required if your down payment is less than 20%.
Glossary of Terms
- Term
- The length of your current contract (e.g. 5 years) before you must renew the rate. Not to be confused with Amortization.
- Amortization
- The total lifetime of the loan (e.g. 25 years).
- Semi-Annual Compounding
- Interest is calculated twice a year, the Canadian standard for fixed mortgages.