Mortgage Calculator Canada
Canadian mortgage rates use semi-annual compounding (not monthly — required by the Interest Act). This calculator converts to the correct effective monthly rate automatically. Includes CMHC insurance, all payment frequencies, and province selection.
How Canadian Mortgages Work
Semi-Annual Compounding — The Key Difference
Canadian law (Interest Act, R.S.C. 1985, s.6) requires mortgage interest to compound semi-annually, not monthly. The effective monthly rate is:
Example: 5.5% quoted → monthly rate = (1.0275)^(1/6) − 1 = 0.4532% (effective annual = 5.571%)
CMHC Insurance Premium Tiers (2024)
| LTV Ratio | Down Payment | CMHC Premium |
|---|---|---|
| Up to 80% | 20%+ | Not required |
| 80.01%–85% | 15%–19.99% | 2.80% of mortgage |
| 85.01%–90% | 10%–14.99% | 3.10% of mortgage |
| 90.01%–95% | 5%–9.99% | 4.00% of mortgage |
Premium is added to the mortgage and amortised over the full period. PST on the premium varies by province.
2025 Canadian Mortgage Rate Guide
| Lender | 1-yr Fixed | 3-yr Fixed | 5-yr Fixed | 5-yr Variable |
|---|---|---|---|---|
| Royal Bank of Canada (RBC) | ~6.25% | ~5.60% | ~5.14% | Prime - 0.90% |
| TD Bank | ~6.24% | ~5.59% | ~5.09% | Prime - 0.85% |
| Scotiabank | ~6.35% | ~5.65% | ~5.19% | Prime - 0.75% |
| BMO | ~6.20% | ~5.54% | ~5.04% | Prime - 0.90% |
| CIBC | ~6.29% | ~5.64% | ~5.14% | Prime - 0.85% |
| National Bank | ~6.20% | ~5.55% | ~5.09% | Prime - 1.00% |
| First National | ~6.00% | ~5.39% | ~4.99% | Prime - 1.05% |
| HSBC Canada | ~6.14% | ~5.49% | ~5.04% | Prime - 0.80% |
Accelerated vs Regular Bi-weekly Payments
| Frequency | Calculation | Annual total | Effect |
|---|---|---|---|
| Monthly | Monthly payment × 12 | 12 payments | Standard |
| Regular bi-weekly | Monthly × 12 ÷ 26 | 26 payments | Same annual total as monthly |
| Accelerated bi-weekly | Monthly ÷ 2 | 26 payments | ~1 extra month/year → 2–4 yrs faster |
| Weekly | Monthly × 12 ÷ 52 | 52 payments | Slight interest saving |
Stress Test (OSFI Guideline B-20)
All federally regulated lenders must qualify borrowers at the greater of: (a) contract rate + 2%, or (b) 5.25%. This applies to both insured and uninsured mortgages. The stress test ensures you can handle rate increases at renewal.
Frequently Asked Questions
How is Canadian mortgage interest different from US mortgages?
Canadian law requires semi-annual compounding, not monthly. The effective monthly rate is: r = (1 + quoted_rate / 2)^(1/6) − 1. At 5.5% quoted, the effective monthly rate is 0.4532% — slightly higher than a US mortgage quoted at the same rate.
What is CMHC insurance and when is it required?
CMHC insurance is mandatory when your down payment is less than 20%. Premiums: 2.80% (15–20% down), 3.10% (10–15% down), 4.00% (5–10% down). The premium is added to your mortgage balance and amortised over the full term.
What is the Canadian mortgage stress test?
Under OSFI Guideline B-20, lenders must qualify you at the greater of: your contract rate + 2%, or 5.25%. This ensures you can handle rate increases at renewal.
What is accelerated bi-weekly payment and how much does it save?
Accelerated bi-weekly = monthly payment ÷ 2, paid 26 times per year. This makes one extra full monthly payment annually, typically cutting 2–4 years off a 25-year mortgage and saving tens of thousands in interest.
What is the minimum down payment in Canada in 2025?
Under CA$500,000: 5% minimum. CA$500,001–$1,499,999: 5% on first $500k + 10% on remainder. CA$1,500,000+: 20% minimum (CMHC insurance not available). The insured limit was raised to CA$1.5 million in December 2024.
References
- Canada Mortgage and Housing Corporation (CMHC) — Homeowner Mortgage Loan Insurance.
- Bank of Canada — Monetary Policy and Policy Rate Decisions.
- OSFI Guideline B-20 — Residential Mortgage Underwriting Practices and Procedures.
- Interest Act, R.S.C. 1985, c. I-15 — Semi-annual compounding requirement (s.6).
- Financial Consumer Agency of Canada (FCAC) — Mortgage tools and calculators.
