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. Renewing or refinancing? Click here.
We've refreshed our calculator design, but you can still temporarily access the previous version here.
Is your mortgage payment calculator free?
What information do I need to use the mortgage payment calculator?
Why does your monthly calculator have four columns?
How do payments differ by province in Canada?
What is mortgage default insurance?
What is an amortization schedule?
Jamie David, Director of Marketing & Mortgages
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
How to calculate mortgage payments
Calculating mortgage payments used to be complex, but our mortgage payment calculator makes it much easier. Ratehub.ca’s mortgage payment calculator gives you everything you need to test different scenarios to help you decide what mortgage is right for you. Read on for more information on how the calculator works.
How to 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.
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.