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# Average Mortgage Payments in Ottawa

This piece was originally published on February 13, 2017, and was updated on October 18, 2022.

Ever wondered how much it would cost to purchase a house in Ottawa? With a 3.7% year-over-year change, the average home price in the nation’s capital increased to \$643,900 in September 2022. According to the Canadian Real Estate Association (CREA), this is only just above the average house price in Canada, even with the increase.

To determine what your average monthly mortgage payment would be if you bought the average home in Ottawa, a few details must first be ironed out. You must select the size of your down payment you wish to place, mortgage rate, amortization period, and payment frequency. The first thing we’ll look into is the down payment.

## Down payment

Since Ottawa’s average home price is more than \$500,000, your minimum down payment is calculated as follows:

• If the home price is above \$500,000, the minimum down payment is 5% of \$500,000 (which is \$25,000) plus 10% of the portion of the home’s price above \$500,000. The formula is as follows: \$500,000 x 5% + (home price – \$500,000 x 10%).
• If the home price is \$1 million or more, the minimum down payment is 20% of the home price. The formula is as follows: home price x 20%.

Getting back to the average home in Ottawa, the minimum down payment of 10% of \$143,900 and 5% of \$500,000 would be \$39,922. Because the down payment is below 20%, \$24,159 in mortgage insurance will be required. For a home with a selling price of \$643,900, a down payment of 20% would be \$128,780.

Assuming we make the minimum down payment, the total mortgage required to purchase the average Ottawa home would be \$628,137. This value is calculated by subtracting our down payment from the asking price of the home and adding on the required mortgage insurance.

## Mortgage rates

You can choose between a fixed-rate and variable-rate mortgage. A fixed rate is useful if you prefer locking in your rate for the term. On the other hand, the rate on a variable-rate mortgage can fluctuate since it’s based on the prime rate. When the prime rate changes, your mortgage rate will also change. When comparing fixed and variable rates, you’ll also notice that fixed rates are typically higher than variable rates. This is because there is a risk for banks in guaranteeing a rate for a prolonged period of time.

When looking for a mortgage, it’s also important to select the lowest rate as it will help reduce the total interest paid over the life of your mortgage. Comparing rates from multiple providers will help you secure the best mortgage rate. A mortgage broker can also help you find the lowest mortgage rate by comparing offerings from multiple providers on your behalf.

Once you’ve decided between a fixed or variable rate, you’ll have to decide on the term of your mortgage rate. The term can span multiple years with the most common being five years. To calculate the average mortgage payment in Ottawa, we’ll use the best 5-year fixed rate currently on the market (4.44% as of October 18, 2022).

## Amortization period

The amortization period determines how long you’re going to take to pay off your mortgage. By having a shorter amortization period, more of your payments will be allocated to paying down the principal of your mortgage. This decreases the total interest you pay on your mortgage. If you opt for a longer amortization period, your mortgage payments will decrease, but a larger portion will go to paying off interest on your mortgage and not principal. When deciding on an amortization period, you must determine your ability to meet your mortgage payments and whether you can handle larger payments. Amortization periods typically range between five and 30 years with the most popular term for new mortgages being 25 years—this will be the period used for our calculation. We highly recommend using our amortization calculator if you want to get a sense of what your monthly mortgage payments would be under different amortization length scenarios.

## Payment frequency

Providers offer multiple payment frequencies with the most popular offerings being monthly, bi-weekly, or accelerated bi-weekly. Selecting a payment frequency that works best with your lifestyle can make budgeting easier and less of a hassle. To calculate the average mortgage payment in Ottawa, we’ll use a monthly payment.

## Mortgage payment

Now that we have decided on a 5% down payment and have selected the best 5-year fixed mortgage rate of 4.44% with a 25-year amortization, we can use a mortgage payment calculator to determine our monthly mortgage payment. The average monthly mortgage payment for a \$643,900 home in Ottawa is \$3,456.