Mortgage payment calculator

The mortgage payment math, in plain English

A monthly mortgage payment is a single number doing two jobs at once. The first job is chipping away at the principal, which is the actual loan balance. The second job is paying interest on whatever balance is still left. Early in the loan, almost all of the payment is interest. As the balance shrinks, the principal share grows. By the last few years of an amortization, almost the whole payment is principal. That sliding split is why a higher interest rate costs more month-to-month and also slows the principal pay-down for years, which is the part most first-time buyers miss when they're staring at a rate sheet.

The calculator above runs the standard Canadian formula on the inputs you give it: the loan amount (purchase price minus down payment), the interest rate, and the amortization period. It returns the level monthly payment that would pay the loan down to zero exactly at the end of the term, holding rate constant. In real life your rate resets at the end of each term (5 years, 3 years, sometimes shorter), and the payment can shift then. For planning, the level-payment number is the one a lender quotes and the one you should plug into a household budget.

The five inputs that actually move your payment

We talk to first-time buyers all week, and the same five inputs show up in every conversation. Two of them you control. Three of them the market controls.

• Purchase price. The headline number. It cuts both ways. A higher price means a bigger loan, and potentially a bigger insured-mortgage premium tier (see below).
• Down payment. Reduces the loan amount one-for-one. Crossing the 20% threshold also removes CMHC mortgage default insurance, which lowers the balance you're borrowing and changes the rate menu the lender will offer.
• Interest rate. Quoted as an annual percentage, compounded semi-annually in Canada (a real wrinkle: the Canadian mortgage convention differs from the US monthly-compounding default). The calculator handles the conversion.
• Amortization period. How long the loan is scheduled to take to pay off if you only make minimum payments. The longer the amortization, the lower the monthly payment, and the more total interest you pay across the life of the loan. In Canada the standard maximum on an uninsured mortgage is 30 years; for insured mortgages there are new 30-year rules we walk through below.
• Payment frequency. Monthly is the simple default. Bi-weekly accelerated ends up paying down a little extra principal each year, which is meaningful over decades but small month-to-month. We treat the calculator's monthly output as the planning number, then use the accelerated bi-weekly calculator to model the savings if you want them.

Why a small rate change changes more than you think

Most buyers underestimate how much a rate move matters. On a $700,000 mortgage with a 25-year amortization, the monthly payment at 4.5% sits at roughly $3,891. Bump the rate to 5.5% (a one-percentage-point change) and the payment is roughly $4,299 instead. That's around $408 a month, every month, for the life of the term, and the loan pays off principal slower the whole time. The three-rate comparison table at the top of this page is there because seeing the numbers side by side is the fastest way to internalize that.

Insured vs uninsured: when CMHC kicks in

If your down payment is less than 20% of the purchase price, federal rules require the lender to insure the mortgage against default. The two big insurers are CMHC (a federal Crown corporation) and two private competitors, Sagen and Canada Guaranty. The premium is paid by you, calculated as a percentage of the loan, and almost always added to the mortgage balance rather than paid in cash. The premium tiers run from roughly 2.4% at 80% loan-to-value up to 4.0% at 95% loan-to-value, with a 0.20% surcharge if the amortization is longer than 25 years (CMHC published premium table).

So an insured mortgage carries a higher balance (premium added) but typically a lower rate. An uninsured mortgage (20% down or more) skips the premium, but the rates posted are usually a touch higher because the lender carries the risk. Whether the insured-with-lower-rate or the uninsured-with-no-premium path is cheaper depends on the specific numbers; we have a dedicated CMHC insurance premium calculator for buyers stuck on that decision.

25-year vs 30-year amortization: what changed in December 2024

Until December 2024, the only way to get a 30-year amortization in Canada was to put 20% or more down. On December 15, 2024 that changed: first-time buyers became eligible for 30-year amortizations on any qualifying insured purchase, and non-first-time buyers became eligible for 30-year amortizations specifically on newly constructed homes (Morningstar summary of the federal rule change). The federal definition of "first-time buyer" uses a four-year look-back. Neither you nor your spouse or common-law partner can have lived in a home either of you owned during the current calendar year or any of the four preceding years.

The trade-off is the one we already named: a 30-year amortization lowers the monthly payment but lengthens how long you pay interest, and CMHC charges that 0.20% surcharge on the insurance premium for the longer term. Most of the first-time buyers we work with run both scenarios through this calculator before deciding. A majority pick the 30-year for the breathing room on monthly cash flow, then plan to use prepayment privileges to shorten the effective amortization once they're settled.

The qualifying-rate trap

One number on this calculator is the payment you will actually make. A different number is the payment the lender will pretend you make when deciding whether to approve you. That second number comes from the federal OSFI Guideline B-20 mortgage stress test, which requires every federally-regulated lender to qualify borrowers at the higher of their contract rate plus 2% or the published qualifying rate of 5.25%, whichever is higher.

If your contract rate is 4.5%, the lender qualifies you on a 6.5% rate. That doesn't change your real payment, but it does change the maximum mortgage they'll approve. Our stress-test calculator models exactly how much the approval ceiling moves; this calculator is for the actual payment once you have the loan.

What we tell first-time buyers about payment shock

The single number that matters more than any of these is how the new payment compares to what you're paying in rent today, plus what you're saving each month. Mortgage payment + property tax + strata fees (if applicable) + utilities is the real all-in carry. If your current rent + savings combined is meaningfully less than that all-in number, you're looking at payment shock: the lender approved the loan, but the lifestyle won't accommodate it. Run the calculator above, then add a realistic annual property tax divided by twelve, and strata fees if relevant. The number that comes out is the one your household will actually live with.

How to use this calculator with a Fraser Valley listing

Pull a listing from our live MLS feed or any Fraser Valley brokerage page. Drop the list price into the calculator, set a realistic down payment from your FHSA + RRSP HBP + savings, and use a rate within a quarter point of what your mortgage broker has quoted on a hold. The result is the payment your lender would actually book, useful as both a sanity check on the listing and a planning anchor for the months between offer and possession. Want a second pair of eyes on the math? Book a 20-minute chat with the FRIVE team. We work with first-time buyers across the Fraser Valley every day.

Frequently asked questions

What's the difference between fixed and variable mortgage rates in Canada?

A fixed-rate mortgage locks your rate (and payment) for the length of the term, typically 5 years in Canada, though 3-year and 2-year terms exist. A variable-rate mortgage moves with the lender's prime rate, which in turn tracks the Bank of Canada's overnight policy rate. The Bank of Canada held the overnight rate at 2.25% in January 2026. Whether fixed or variable wins over a 5-year term is a coin flip in hindsight; over decades of Canadian data, variable has edged out fixed slightly on average, but the psychological cost of a payment that changes month-to-month is real and shouldn't be ignored.

How is interest compounded on a Canadian mortgage?

Canadian mortgages compound semi-annually, not monthly. In practice the calculator handles the conversion: the rate you type in (the annual rate the lender quotes) is what the calculation uses. The semi-annual convention makes Canadian effective rates very slightly lower than the same nominal rate compounded monthly the way US mortgages do, but it's a small difference and doesn't change how you read the result.

Does this calculator include property tax and insurance?

No. It calculates the principal-and-interest portion only. To get a realistic all-in monthly carry for a Fraser Valley home, add the annual property tax divided by twelve, plus strata fees if it's a condo or townhouse, plus home insurance (typically $80–$150 per month for most Fraser Valley properties; confirm with a broker), plus utilities. That's the household budget number; the calculator output is the mortgage-only number lenders quote.

What amortization should I pick?

Default to 25 years if you can comfortably afford the payment. Stretch to 30 years if cash flow is genuinely tight or you want margin against a rate reset. Since December 15, 2024, first-time buyers in Canada are eligible for 30-year amortizations on any qualifying insured purchase, with a 0.20% premium surcharge added by CMHC. There's no rule against booking 30 years and prepaying as if it were 25. That's the move we see most often from cautious first-time buyers.

What rate should I use to plan?

Use a rate quoted to you by an actual mortgage broker on a current rate hold. National rate sites are useful for ballpark sanity checks but they aren't your rate. As of early 2026 the best 5-year fixed insured rates in Canada have generally run in the 4.0%–4.6% range, with variable rates broadly in the same band. The rate you get depends on credit, down payment, property type, and which lender's risk box you fit. For a conservative planning number while you shop, use the higher end of that range.

How does my down payment affect the payment?

Every dollar of down payment reduces the loan balance by a dollar, which reduces the monthly payment proportionally. Crossing the 20% threshold has a bigger effect than that: you skip the CMHC insurance premium (which would otherwise add roughly 2.4% to 4.0% to the loan amount) and you move into the uninsured rate menu. The down payment calculator breaks down the federal minimum tiers (5% on the first $500K, 10% on the portion between $500K and $1.5M, 20% on $1.5M+) so you can see exactly where the thresholds sit.

Can I deduct mortgage interest in Canada?

Not on a personal residence. Canada is unlike the US in this regard. Mortgage interest is only deductible if the property generates income (e.g. a rental unit), and even then the rules are specific. For your primary residence, the trade-off is the principal-residence capital gains exemption, which generally protects appreciation from tax when you sell. If your situation involves both rental income and a primary residence, talk to an accountant before relying on any deduction logic.

What happens when my term ends?

At the end of the term (typically 5 years), you renew. The lender offers you a new rate for a new term at whatever the market rate is then. The amortization clock keeps ticking (you don't restart at year zero), but the payment recalculates from the remaining balance at the new rate. This is why a five-year fixed isn't the same as a five-year loan; it's a 25- or 30-year loan with one of multiple rate resets. Renewal is the moment to shop around; lenders don't always offer existing customers their best rate.

Should I lock my rate?

Most mortgage brokers will hold a rate for you for up to 120 days while you shop. If you've signed a purchase agreement and you're closing within that window, a rate hold is cheap insurance against a sudden move. If you're still 6+ months out, lock when the rate feels acceptable. There's no skill in calling exact lows, and the difference between a great rate and a fine rate is usually a small share of the total interest you'll pay over the life of the loan.

How is FRIVE different from a rate-shopping site?

We're a Fraser Valley real estate team. We don't sell mortgages and we don't take broker fees. We work alongside your broker and your notary, and we use these calculators the same way you do: to sanity-check what a listing actually costs once it's yours. The moment your specific situation needs a hold, a pre-approval, or a stress-test answer that applies to you, that's your broker's job. We'll happily make introductions if you don't have one yet.

Sources

1. Bank of Canada — Policy interest rate. bankofcanada.ca
2. Bank of Canada — Rate hold press release, January 28, 2026. bankofcanada.ca/2026/01
3. OSFI Guideline B-20 — Residential Mortgage Underwriting Practices and Procedures (stress test). osfi-bsif.gc.ca
4. CMHC — Mortgage loan insurance premium table and 30-year amortization rules. cmhc-schl.gc.ca
5. Government of Canada — December 2024 changes to insured mortgage rules and 30-year amortization for first-time buyers and new-construction buyers (covered by Morningstar Canada's summary). morningstar.com
6. FRIVE journal — First-Time Home Buyers Fraser Valley 2026. first-time-home-buyers-fraser-valley-2026