What will your monthly mortgage payment be?

Here's a detail that surprises a lot of buyers: Canadian fixed-rate mortgages don't compound monthly the way American ones do. By law, they compound semi-annually, twice a year, even though you make payments every month. That's why a quick "rate ÷ 12" calculation on a U.S. mortgage site will slightly overstate your Canadian payment. This calculator converts your annual rate to its true equivalent monthly rate first (the formula is (1 + rate/2)^2/12 − 1), then amortizes the loan the way your lender will.

Two other numbers shape your payment just as much as the rate:

Amortization is the total runway to pay the mortgage off, most commonly 25 years, up to 30 in many cases. A longer amortization lowers the monthly payment but raises the total interest, often dramatically. Slide the select above between 20, 25, and 30 years and watch the "total interest" line: the difference is frequently six figures on a North Shore purchase. (Don't confuse amortization with your term, the 1-to-5-year contract with your lender, after which you renew at whatever rates look like then.)

Down payment determines whether you need mortgage default insurance. Below 20% down, your mortgage must be insured (through CMHC, Sagen, or Canada Guaranty), and the premium is added to your loan: roughly 4.00% of the loan if you put down less than 10%, 3.10% at 10–15%, and 2.80% at 15–20%. The calculator adds that rough premium automatically and tells you when it's doing so. Insured mortgages also come with conditions, price caps and amortization limits among them, that your broker will walk you through.

Finally, remember the stress test: to qualify at a federally regulated lender, you must prove you could carry the payment at the higher of your contract rate plus 2% or the minimum qualifying rate. So the payment you see above is what you'd actually pay, but the bank sizes your approval on a tougher hypothetical. It's the single most common reason a buyer's real budget differs from their back-of-napkin one.

Disclaimer: these figures are estimates only. Actual payments depend on your exact rate, compounding, payment frequency, insurance premium, and taxes (PST is due on insurance premiums in BC, for instance). Always confirm with your lender or mortgage broker before making decisions.