Mortgage Payment Calculator Canada
Get a sense for your mortgage payments, the cash you'll need to close and the monthly carrying costs with Ratehub.ca’s mortgage payment calculator.
WATCH: How to change your mortgage payment amount
How do I use the mortgage payment calculator?
To use the calculator, start by entering the purchase price. Then, select an amortization period and mortgage rate. The calculator shows the best rates available in your province, but you can also add a different rate. The calculator will now show you what your mortgage payments will be.
By default, the mortgage payment calculator will show four different monthly payments, depending on the size of your down payment. It will automatically calculate the cost of mortgage default insurance. You can change the size of your down payment and the payment frequency to see how your regular payment will be affected.
Our calculator also shows you what the land transfer tax will be, and approximately how much cash you’ll need for closing costs. Additionally, you can use the calculator to estimate your total monthly expenses, see what your payments would be if mortgage rates go up and show what your outstanding balance will be over time.
If you’re buying a new home, it’s a good idea to use the calculator to determine what you can afford before you start house-hunting. If you’re renewing or refinancing and know the total amount of the mortgage, use the “Renewal or Refinance” tab to estimate mortgage payments without accounting for a down payment.
In order to effectively use this calculator, here is the information you’ll need to have:
- Home price: The dollar amount of your home
- Down payment: The dollar amount that you are able to pay up front when purchasing your home
- Condo fees (if applicable): The approximate dollar amount of any monthly condo fees you may be liable for
Is the mortgage payment calculator free?
Yes! Using Ratehub.ca’s mortgage payment calculator is completely free, and a great way to determine your overall mortgage affordability when setting a home-buying budget.
Why does the down payment automatically change on the calculator?
The mortgage payment calculator will automatically present you with four down payment scenarios, so you can directly compare how your mortgage rate and payments will differ depending on how much cash you can pay up front on your home purchase.
The left-most column will display the smallest down payment you can make, based on the home’s asking price; this amount is 5% for homes priced under $500,000, and then an additional 10% for the portion between $500,000 to $1 million. For example, an asking price of $650,000 will require a minimum down payment of 6.2% ($40,300). In the remaining columns, the calculator will show you what your mortgage could look like with a 10%, 15%, or 20% down payment. If the asking price is $1 million or more, the calculator will automatically display a 20% down payment (the minimum for homes priced more than $1 million) in all columns. You can also change these down payment amounts manually to suit your specific circumstances.
How much is the monthly mortgage payment for a $500,000 house, over 30 years?
Let’s take a look at what a monthly mortgage payment would be for a home priced at $500,000, and a mortgage amortized over 30 years.
A 30-year amortization is only available for “low-ratio” mortgages, meaning the buyer has paid 20% or more as their down payment. Assuming this is the case, according to our calculator:
- Home purchase price: $500,000
- Down payment: 20% ($100,000)
- CMHC Insurance: $0
- Total mortgage: $400,000
- Amortization: 30 years
- Five-year fixed mortgage rate: 5.24%
- Payment frequency: Monthly
= Mortgage payment: $2,192
What is an amortization schedule?
An amortization schedule shows your monthly payments over time and also indicates the portion of each payment paying down your principal vs. interest. The maximum amortization in Canada is 25 years on down payments less than 20%. The maximum amortization period for all mortgages is 35 years (only available from alternative or B-lenders).
Though your amortization may be 25, 30 or 35 years, your term will be much shorter. With the most common term in Canada being 5 years, your amortization will be up for renewal before your mortgage is paid off, which is why our amortization schedule shows you the balance of your mortgage at the end of your term.
How does my salary impact my mortgage payment?
A borrower’s income is an important consideration when qualifying for a mortgage; a lender will want to confirm a mortgage applicant has sufficient cash flow to cover their regular mortgage payments, along with their other debt obligations and cost of living expenses. Mortgage lenders will use two ratios, called the Gross Debt Ratio, and Total Debt Ratio, to determine whether a borrower’s existing debt and expenses are within a manageable range, and that they can also take on a mortgage without presenting a default risk (a sudden inability to make their mortgage payments).
Learn more about debt service ratios
Borrowers with sufficient income, good credit standing and lower debt ratios will qualify for the most competitive mortgage rates, which in turn will affect how much they’ll pay on their mortgage; a lower mortgage rate can help save thousands of dollars over the course of their mortgage’s amortization.
Are mortgage payments made every month?
Monthly mortgage payments are the most common, but depending on your mortgage product, you may have the ability to increase the frequency of your payments, or make a large lump sum payment on occasion. The benefit of this is that it helps pay your mortgage down faster, thereby reducing the amount of interest paid on the mortgage.
Mortgage frequency options include, but are not limited to, weekly, bi-weekly, and accelerated bi-weekly payments. Learn more about your mortgage payment options.
How do I calculate monthly payments on a mortgage?
While plugging your info into our calculator is a fast and convenient way to determine your mortgage payments, let’s break down the math. First, Let’s assume you are buying a home with an asking price of $500,000, and are making a down payment of 20% ($100,000), with a mortgage rate of 4.89%, and amortization of 25 years.
Step 1: calculate your mortgage principal amount with the following formula:
Purchase price - down payment = mortgage principal
$500,000 - $100,000 = $400,000
Step 2: Determine your monthly interest rate
Take your 4.89% rate and divide by 12 to determine your monthly interest rate = 0.00489.
Monthly interest rate = annual interest (%) / 100 / 12 months
Monthly interest rate = 4.89 / 100 / 12
Monthly interest rate = 0.00489
Step 3: Calculate the number of total payment periods:
Payment periods = number of years x 12 months
Payment periods = 25 x 12
Payment periods = 300
Step 4: Apply the mortgage payment formula:
Monthly payment = mortgage principal x (1+ monthly interest rate)^number of payment periods)/(1+monthly interest rate)^number of payment periods -1)
400,000 x (1+ 0.00459)^300)/(1+0.00489)^300 - 1) = $2,301
What is mortgage default insurance?
Mortgage default insurance (sometimes known as CMHC insurance) protects lenders from mortgages that default. Mortgage default insurance is mandatory for all mortgages in Canada with down payments of less than 20% (high-ratio mortgages). This is an additional cost to you, and is calculated as a percentage of your total mortgage amount. For more information on mortgage default insurance rates, please read our guide to mortgage default insurance (CMHC insurance).
Why does my rate change when I adjust my amortization from 25 years to 30 years?
Depending on the size of your down payment, you will either be classified as a low-ratio borrower (meaning you’ve paid more than 20% down), or a high-ratio borrower (less than 20% down). There are different lending rules that will apply to you, depending on the type of borrower you are.
A high-ratio borrower is considered by a lender to pose higher risk of default, because they have put less cash equity up front into the home purchase, and are more leveraged with mortgage debt. The lender offsets this by requiring these borrowers to take out mortgage default insurance – also referred to as CMHC insurance – which is backed by government funds in case the borrower stops paying their mortgage. Because of this added security, lenders will usually offer lower rates for this group. As well, high-ratio borrowers are limited to an amortization period of 25 years. Learn more about CMHC insurance.
A low-ratio borrower, because they pose less risk of default, is not required to take out CMHC insurance, and can amortize their mortgage up to 35 years. However, lenders will often price rates for these borrowers slightly higher. The calculator takes this into account if you change the amortization length (and whether the mortgage is high- or low-ratio) in the input fields.
What if I’m a first-time home buyer?
The calculator takes into account any land transfer tax rebates you will qualify for as a first-time home buyer, based on your location. For example, if you’re looking to purchase a home in Toronto, Ontario, you will qualify for a combined land transfer tax rebate ($4,475 at the municipal level and $4,000 at the provincial level) of $8,475. Simply select "Yes" in the “Are you a first-time home buyer?” field, and the rebate will be automatically calculated in your closing cost results.
Are closing costs included in my mortgage payment result?
Yes, the mortgage payment calculator will also total the closing costs you can expect to pay when finalizing your home purchase. Simply select the “Cash needed to close” tab to see the totals, including estimated lawyer fees, title insurance costs and appraisal fees, just to name a few.
Why does the Land Transfer Tax output change when I select Toronto, Ontario, as my purchase location?
Toronto, Ontario, is the only city in Canada to also charge a municipal land transfer tax (MLTT) in addition to LTT levied by the province. The MLTT charged by the City of Toronto ranges between 0.5% to 2.5% for homes priced between $55,000 to $2 million. On September 6, 2023, City Council approved an addition to the graduated MLTT threshold, expanding it to a range of 3.5% to 7.5% for homes priced between $3 million and $20 million. The additional MLTT range officially took effect on January 1, 2024.
WATCH: January 24, 2024 Bank of Canada announcement
February 2024: Mortgage market update
The mortgage market in Canada has experienced a great deal of volatility in the last couple of months, and the start of 2024 has proved to be no exception. Bond yields are once again on the rise, ending a brief descent begun in December and exerting upward pressure on fixed mortgage rates. Meanwhile, variable mortgage rates remain high after a total of 10 rate hikes carried out by the Bank of Canada between March 2022 and July 2023 that brought the Overnight Lending Rate to 5%. If you’re currently looking for a mortgage rate in Canada, read on:
- Real estate update: On February 14, 2024, the Canadian Real Estate Association (CREA) published the numbers for the Canadian housing market for the month of January. The latest figures indicate that the housing market in Canada is showing signs of recovery after a relatively sluggish end to 2023. A grand total of 25,540 residential properties were sold across the country in January, up by a notable 22% year over year, and up by 3.7% monthly. The number of new listings, meanwhile, rose by just 1.5% in January. This was not enough to keep pace with renewed demand, which added fresh pressure on the housing market. As a result, the average home price in Canada rose by 7.6% on an annual basis to $659,395. Reasonably robust demand and a relatively small number of new listings helped to push Canada’s housing market towards the “seller-friendly” of the balanced market spectrum, with the sales-to-new-listings ratio (SNLR) ticking up to 58.8%. The SNLR is used by CREA to gauge competition in the marketplace, and is considered balanced with a ratio between 40-60%. Above and below that range reflect sellers’ and buyers’ markets, respectively.
Read more: Canadian realtors hopeful sales growth will continue
CPI update: At last, there is some welcome good news on this front, with the latest Consumer Price Index (CPI) figure for the month of January coming in at just 2.9%, according to Statistics Canada. January’s CPI not only beat expectations, but it marks the first month since March 2021 where the CPI rose by less than 3%. The biggest factor contributing to this lower CPI was falling gas prices, which came in at 3.2% in January, down by 0.3% from December. In fact, gas prices have been falling steadily for the past five months. Food costs were also significantly down, at just 3.4%, compared to 4.7% the month before. Given that this most recent CPI reading falls within the Bank of Canada’s inflation target range of 1 - 3%, market observers are now expecting the Bank to hold rates steady in the near term. Then, provided inflation continues to trend downwards, experts are predicting that the Bank will begin cutting rates as early as the second quarter of this year.
Read more: Inflation falls to 2.9% in January
2024 Housing market forecast
Taking into account the growing anticipation of rate cuts along with pent-up buyer demand, CREA revised its projections for 2024 and 2025.
The organization projects that some 489,661 homes will be sold across the nation in 2024, up by 10.3% from 2023. Sales growth is anticipated to be most significant in markets that have seen consistent housing demand, such as Alberta. That said, growth is also expected in markets that have suffered from historically low demand, including Ontario, British Columbia and Nova Scotia. CREA predicts that the average home price in Canada will climb by 2.3% to $694,173 in 2024, with Alberta, Quebec, New Brunswick, Nova Scotia and Newfoundland and Labrador seeing the biggest increases. Home prices in British Columbia and Ontario are expected to remain relatively flat.
Housing market activity should continue to gather momentum in 2025, with home sales forecast to total 525,498 homes (a year-over-year increase of 7.3%, while the average home price in Canada is expected to reach $722,063, up by 4%.
Highlights from the Bank of Canada's December 6, 2023 announcement
On December 6, 2023, the Bank of Canada left the target for its trend-setting overnight rate unchanged at 5.00% for the third time in a row.
- The central bank’s decision to hold rates was due to a number of factors, including lower-than-anticipated Q3 GDP performance, decreasing inflation, and overall declining consumer activity.
- Canadians with variable-rate mortgages and home equity lines of credit (HELOC) will see their rates stabilize for the foreseeable future.
- Although fixed mortgage rates are not directly affected by the Bank of Canada’s rate hold, the bond market has cooled in reaction to the announcement, meaning that fixed mortgage rates could well come down in the near future.
- Canadians looking to buy a home or whose mortgage is up for renewal are wise to get a rate hold now to protect themselves against any future rate volatility. If mortgage rates change at any time during your rate hold, you are still eligible for the lowest rate.
Why use a mortgage payment calculator?
When planning to buy a home, it's easy to focus on the final purchase price or your mortgage amount. But actually, the most relevant number to you will be your regular repayment. After all, your mortgage payments are the amount that you'll need to take from your paycheque each month.
What is a mortgage payment?
Your mortgage payment is the amount of money you must pay every month to pay down, and ultimately pay off, your mortgage loan. Your mortgage payment covers both the principal (the actual amount of the loan) and the interest on the loan. It can also include mortgage default insurance, also sometimes known as CMHC insurance (required when your down payment is less than 20% of the cost of your home), property taxes and other fees. When you first begin making payments, more of it goes towards covering interest, but over time, more of your payment will eventually go to paying down your mortgage balance.
What are some factors that can affect your mortgage payments?
There are several key factors that can affect the size of your mortgage payments. Some of these include:
- Your home price: This dictates how much you will need to borrow.
- Your down payment: The more you are able to pay up front towards the purchase of your home, the smaller your required mortgage amount. In turn, the smaller your monthly mortgage payment will be.
- Your total mortgage amount: This is the price of your new home, less the down payment, plus mortgage insurance, if applicable.
- Your interest rate: The lower the interest rate on your mortgage, the lower your monthly payments will be. Ratehub.ca can help you find the best mortgage rates available today to keep your payment as low as possible. When choosing between a variable or fixed mortgage rate, generally speaking, variable rates provide lower mortgage payments as they tend to be lower. According to a landmark 2001 study, historically, over 90% of Canadians who have maintained a variable mortgage rate throughout their entire mortgage term have paid less in interest than those who have stuck to a fixed rate. However, if you seek stability throughout your mortgage term, a fixed rate may be more suitable for you.
- Your amortization period: Your amortization period is the length of time it takes to pay off your entire mortgage. The longer your amortization period is, the lower your monthly mortgage payments will be. That said, since it will take you a longer time to pay off your mortgage, you will end up paying more in interest.
How do I get approved for a mortgage?
When thinking about your monthly mortgage payments, it’s also important to consider what you’ll need in order to get approved for a mortgage. Here are some of the most important things that prospective lenders will want to see:
- A good credit score: You need a credit score of 680 or higher to qualify for the best mortgage rates that allow for the lowest monthly mortgage payments. To qualify for any mortgage at all, you’ll need a credit score of at least 560. Read more on how your credit score affects your ability to get approved for a mortgage.
- Proof of income: You’ll need to provide proof of income in the form of pay stubs and/or tax documents like your Notice of Assessment (NOA). If you recently started a new job, even with proof of income, many lenders will want to see that you’ve held the position for at least a year.
- Ability to pass a mortgage stress test: You will need to pass a mortgage stress test, which ensures that you can still afford your mortgage payments at a rate known as the “qualifying rate”, set by the Office of the Superintendent of Financial Institutions (OSFI), or your contract rate + 2%, whichever is the higher of the two. Following the Bank of Canada's historically large July 13, 2022 rate hike, even with the lowest mortgage rates on the market you will be stress tested at your contract rate + 2%, as this will always be higher than 5.25% (until rates come down again).
- Down payment: The size of your down payment affects the house you can afford as well as the size of your mortgage and associated monthly payments. As well, it affects whether you will need to purchase mortgage default insurance, which is required if your down payment is less than 20% of the value of the home you are purchasing. The minimum down payment you’ll need to have depends on the home you’re looking to buy:
Minimum Down Payment
Less than $500,000
$500,000 - $999,999
5% of the first $500,000 and 10% of any amount over the first $500,000
$1,000,000 or more
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How to lower your mortgage payments
There are a few ways to lower your monthly mortgage payments. You can reduce the purchase price, make a bigger down payment, extend the amortization period or find a lower mortgage rate. Use the calculator to see what your payment would be in different scenarios.
Keep in mind that if your down payment is less than 20%, your maximum amortization period is 25 years. As for finding a lower mortgage rate, it’s always a good idea to speak to a mortgage broker for assistance.
How can you pay off your mortgage faster?
If you are able to pay your mortgage off faster, it can save you thousands of dollars in interest. However, any of the methods required to pay off your mortgage faster will result in larger monthly payments on your part, albeit for a shorter period of time. Be aware that some lenders may include pre-payment penalties with your mortgage, so it’s important to understand the fine print. That said, some of the ways you can pay off your mortgage more quickly include:
- Accelerate your mortgage payment schedule: Switch to a more frequent payment plan. For example, if you were making payments on a monthly basis, you may want to consider paying on a bi-weekly basis.
- Increase the amount of your mortgage payments: Any increase in the amount you are paying towards your mortgage on a monthly basis will speed up the time it takes to pay off your mortgage.
- Make a lump sum payment: If you receive a lump sum such as a tax refund, inheritance, a bonus, etc., and you can afford it, apply that lump sum towards your mortgage payments.