Mortgage Payment Calculator — Canada 2026
Calculate your monthly mortgage payment with a full year-by-year amortization schedule. See how prepayments can save you tens of thousands in interest.
On a $600,000 mortgage, adding just $200/month in extra payments saves roughly $45,000 in interest and takes 4 years off your mortgage.
A monthly mortgage payment is the result of three things: the amount you're borrowing (purchase price minus down payment, plus any CMHC insurance premium added to the loan), the interest rate on your contract, and the amortization period over which you're paying it back. Change any one of those and the payment changes — sometimes by hundreds of dollars per month.
What this calculator does that a generic mortgage calculator doesn't: it uses Canadian semi-annual compounding as required by the federal Interest Act, it builds you a full year-by-year amortization schedule showing how your principal and interest balance shifts over time, and it lets you model lump-sum and accelerated prepayments to see the effect on your total interest paid and your mortgage-free date. American mortgage calculators compound monthly and will give you a payment that's $5–$20 too high every month for the same inputs — that's not a rounding error, it's the wrong country's math.
How Canadian Mortgage Payments Are Calculated
Canadian mortgages compound interest semi-annually, not in advance — a requirement set out in section 6(1) of the federal Interest Act (R.S.C. 1985, c. I-15). American mortgages, by contrast, compound monthly. The math is technical but the practical impact is straightforward: for the same nominal rate, your effective annual rate (EAR) is slightly different in Canada, and your monthly payment is slightly lower than a US calculator would suggest.
The formula goes: convert the nominal annual rate to its semi-annual EAR, then derive the equivalent monthly periodic rate, then plug that into the standard amortizing-loan payment formula. ClearKey's calculator does this automatically. For the full math, see the Canadian mortgage compounding section of our Methodology page.
Your monthly payment is split between principal (paying down the loan) and interest (paying for the use of the lender's money). In the early years of a mortgage, the split is heavily weighted toward interest — on a typical 25-year mortgage at current rates, roughly 57% of your first month's payment goes to interest. By year 15, the split flips: most of each payment is now reducing your principal. This is why prepayments early in a mortgage are dramatically more powerful than the same prepayment late in a mortgage — early prepayments avoid years of compound interest that would otherwise accumulate.
The same $680,000 mortgage in the United States, compounded monthly at the same nominal 4.29%, would produce a monthly payment of about $3,697 — roughly $7 per month higher, or about $2,100 more over the life of the loan. Small per month, real money over decades.
How Amortization Length Changes Your Payment
The amortization period is how long you're spreading the loan over. Canadian mortgages typically run 25 years for default-insured loans (under 20% down) — though the December 2024 federal changes now allow 30-year amortization for first-time homebuyers and buyers of newly built homes — or 30 to 35 years for conventional mortgages with 20%+ down. A longer amortization gives you a lower monthly payment, but you pay far more total interest over the life of the loan.
| Amortization | Monthly payment | Total interest over life | Total cost (principal + interest) |
|---|---|---|---|
| 20 years | $4,217 | $332,000 | $1,012,000 |
| 25 years | $3,690 | $427,000 | $1,107,000 |
| 30 years | $3,343 | $524,000 | $1,204,000 |
Same $680,000 mortgage, 4.29% rate, semi-annual compounding. Numbers rounded.
The 25-vs-30-year decision costs you roughly $97,000 in extra interest, but lowers your monthly payment by about $347. Whether that's a worthwhile trade depends on what you'd otherwise do with the $347 — if you'd invest it consistently in a TFSA averaging 6%+ returns, the math may favour the longer amortization. If you'd just spend it, the shorter amortization wins easily.
Why Prepayments Are So Powerful (Early in the Mortgage)
Most Canadian closed mortgages allow you to prepay 10–20% of the original principal per year without penalty, plus a "double-up" feature that lets you increase any regular payment up to 100% of the contract amount. Each extra dollar paid against principal eliminates years of compound interest that would otherwise accumulate on that dollar.
Same $680,000 mortgage at 4.29% over 25 years. You make a one-time $10,000 prepayment at the start of year 3.
The same $10,000 prepayment made in year 18 would save closer to $3,500 in interest. The lesson isn't that prepayments stop being valuable — they're always valuable — but that timing matters enormously, and the early years of a mortgage are when prepayments compound the most.
If you're considering breaking your current mortgage to refinance at a lower rate, the prepayment analysis above is only half the picture. Use ClearKey's penalty calculator to estimate the IRD or 3-month interest cost of breaking your contract, then compare that against the interest savings from refinancing. The break-even math is rarely as obvious as it looks.
Common Mistakes to Avoid
The most common error. American calculators compound monthly and will give you a payment that's $5–$20 higher per month than the correct Canadian number. Over a 25-year mortgage that's $1,500–$6,000 of error. Always use a Canadian calculator (this one, or any tool that explicitly says it uses semi-annual compounding).
If you put less than 20% down, your CMHC insurance premium (between 0.6% and 4.5% of the loan, depending on your loan-to-value ratio) is added to your mortgage and amortized over the full term. Your monthly payment is calculated on the higher loan amount, not the original price minus down payment. Use the CMHC calculator first, then plug the inflated loan amount into the payment calculator.
Your monthly payment is calculated at your contract rate (the rate the lender actually charges you). The OSFI stress test, which determines whether you qualify for the mortgage in the first place, uses a higher qualifying rate — the greater of 5.25% or your contract rate plus 2 percentage points. The qualifying rate is for approval; the contract rate is what you actually pay. See the stress test guide for full details.
"Bi-weekly" payments — paying every two weeks instead of monthly — come in two flavours: accelerated bi-weekly (your monthly payment divided by 2), and regular bi-weekly (your monthly payment × 12 ÷ 26). Accelerated bi-weekly results in 26 half-payments per year, equivalent to 13 monthly payments instead of 12. That extra payment per year, applied entirely to principal, can shave 3+ years off a 25-year mortgage. Regular bi-weekly does not — it just spreads the same annual amount across smaller payments.
What This Calculator Doesn't Tell You
A monthly payment number is necessary but not sufficient for a real mortgage decision. This calculator deliberately doesn't try to model:
- Property tax, heating, and condo fees — major monthly costs that affect your real housing budget but aren't part of the mortgage payment itself. The GDS/TDS calculator models these as part of total housing affordability.
- Whether you'll qualify — the stress test, GDS/TDS ratios, and lender-specific underwriting are separate calculations. Use the affordability calculator for that.
- Your specific lender's prepayment terms — the 10–20% annual prepayment limit varies by lender, and some lenders apply it to the original principal, others to the current balance. Check your mortgage commitment letter.
- Variable-rate trigger points — if you have a variable-rate mortgage, rate increases shift more of each payment to interest until you hit the "trigger rate," at which point your payment may increase. Variable-rate math has its own complexity.
How Much Income Do You Need to Buy a House in Canada?
Your monthly payment is one thing — qualifying for the mortgage is another. The mortgage stress test Canada 2026 means lenders calculate qualification using a rate of approximately 6.29%, not your actual contract rate. See the full income breakdown at every price point in our income needed to buy a house in Canada guide, or use the affordability calculator directly.
See your full amortization schedule with prepayment analysis — free, no sign-up required.
Open Full Calculator →Frequently Asked Questions
How is a Canadian mortgage payment different from an American one?
Canadian mortgages compound interest semi-annually, not in advance — a federal requirement under the Interest Act. American mortgages compound monthly. For the same nominal interest rate and inputs, the Canadian monthly payment is slightly lower (typically by $5–$20 per month). The difference is small per month but adds up to thousands of dollars over the full term. Always use a Canadian calculator for a Canadian mortgage.
What's the difference between a 25-year and 30-year amortization?
A 30-year amortization gives you a lower monthly payment but you pay substantially more total interest over the life of the loan — roughly $97,000 more on a $680,000 mortgage at 4.29% compared to a 25-year amortization. As of December 2024, 30-year amortization on insured mortgages is available to first-time homebuyers and buyers of newly built homes. Conventional (20%+ down) mortgages can use 30 or even 35-year amortizations regardless of buyer status, depending on the lender.
How much can I prepay on my mortgage each year?
Most closed Canadian mortgages allow you to prepay 10–20% of the original principal per year without penalty, plus a "double-up" feature that lets you increase any regular payment up to 100% of the contract amount. Open mortgages have no prepayment limits. The exact prepayment terms are in your mortgage commitment letter and vary by lender. Check before making a large lump-sum payment to avoid an unexpected penalty.
Should I take a 5-year fixed or a variable rate?
The standard answer is "it depends on rates and your tolerance for payment fluctuation," but the math is more nuanced than that. Variable rates have historically saved borrowers money over multi-decade studies, but recent years have produced large variable-rate increases that wiped out years of savings for borrowers who chose variable in 2020–2021. The right choice depends on whether you can absorb a payment increase if prime rates rise unexpectedly, whether you might want to break the mortgage early (variable-rate penalties are typically much smaller), and the size of the discount from prime your lender offers. See our fixed vs variable analysis for a full framework.
Does my monthly payment include property tax and insurance?
Sometimes. Some lenders require you to pay property tax through your mortgage payment (the lender then remits it to your municipality on your behalf). This is more common for default-insured mortgages and for lenders who want extra control over tax payments. Other lenders let you pay property tax directly to the city. Home insurance is paid separately to your insurer regardless. CMHC insurance premiums (if applicable) are added to the loan amount, not paid as a separate monthly cost.
Why does the calculator's payment differ slightly from my lender's quote?
Three common reasons. First, your lender may include property tax or other escrowed amounts in their stated monthly payment. Second, your lender's payment frequency may differ — accelerated bi-weekly produces a higher equivalent monthly outflow than calendar monthly. Third, your lender may have applied prepayments, fees, or rate adjustments not modelled here. Always treat any calculator's output as an estimate; your lender's commitment letter is the authoritative number.
What's the "trigger rate" on a variable mortgage?
On most variable-rate mortgages with fixed payments, your monthly payment stays the same as prime moves — but the split between principal and interest shifts. When prime rises enough that your full monthly payment is going to interest with nothing left for principal, you've hit the "trigger rate." At that point, your lender will typically require an increased monthly payment, a lump-sum reduction, a switch to a fixed product, or extension of the amortization. This isn't a concern in falling-rate environments, but is worth modelling if you take a variable mortgage in a low-rate climate.
This calculator is for educational purposes only and does not constitute financial, mortgage, or legal advice. Payment calculations use semi-annual compounding per Canadian mortgage standards. Actual payments may vary based on lender, payment frequency, escrow arrangements, and mortgage terms. Always consult a licensed mortgage professional. ClearKey is not a licensed mortgage brokerage.