Mortgage Calculator Canada 2021

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New Mortgage
Home Price
Down Payment
Interest Rate
Amortization (Years)
Payment Frequency

You have chosen to make a down payment below 20%. You are required to purchase mortgage default insurance (CMHC insurance). This cost is included in the mortgage principal.

Calculated Monthly Payment
Your CMHC Premium is $13,95014k

Your Land Transfer Tax is $12,950 in

Your land transfer tax could be lower if you are a first-time home buyer

Mortgage Costs Over 5-Year Term

Total Cost:$117,876
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Glossary and FAQ

Down Payment

The down payment is the amount you will pay upfront to obtain a mortgage.

What’s my minimum down payment?

Your minimum down payment depends on the purchase price of your property.

  • If your purchase price is under $500,000, your minimum down payment is 5% of the purchase price.
  • If your purchase price is $500,000 to $999,999, your minimum down payment is 5% of the first $500,000, plus 10% of the remaining portion.
  • If your purchase price is $1,000,000 or more, your minimum down payment is 20% of the purchase price.

If you’re self-employed or have poor credit, your lender may require a higher down payment.

Are there additional costs or restrictions associated with small down payments?

Yes. If your down payment is below 20% of the purchase price,

  • you will be required to purchase mortgage default insurance, and so
  • your amortization period cannot exceed 25 years.

For more information, see the section on CMHC insurance below.

What is a high-ratio mortgage?

A mortgage with a down payment below 20% is known as a high-ratio mortgage. The term ratio refers to the size of your mortgage loan amount as a percentage of your total purchase price.

All high-ratio mortgages require the purchase of CMHC insurance, since they generally carry a higher risk of default.


The amortization period is the total length of time over which you plan to pay off your mortgage.

What amortization period should I choose?

While we cannot give advice for your specific situation, here are some general guidelines:

  • The most common amortization period in Canada is 25 years. Unless you have specific concerns, a 25 year amortization works well in most cases.
  • Choosing a shorter amortization period will lower your lifetime interest cost, but will result in a higher monthly or bi-weekly payment.
  • If you choose an amortization period of over 25 years, you must make at least 20% down payment. See the section on CMHC insurance below.
Ontario Lic. #13115

Mortgage Term

The term of your mortgage is the length of time for which you sign a legal agreement with your lender. For the length of the term, you are obligated to their conditions and penalties.

What term should I choose?

The most common term length in Canada is 5 years. Unless you have specific concerns, a 5-year term generally works well. Each lender will offer different options for term length and rates; contact your lender for more details.

For professional help with determining which term is right for you, please contact our professional mortgage broker.

What happens at the end of a term?

At the end of each term, you have the option to renew or refinance your mortgage.

  • Renewing your mortgage involves signing for another term with your existing lender. Your monthly payment and interest rate may change.
  • Refinancing your mortgage involves signing a new term agreement, possibly with a different rate or lender. Refinancing allows you to take advantage of lower rates or better options not offered by your current lender.

Interest Rates

The interest rate determines how much interest is added to the unpaid portion of your mortgage loan.

How does the interest rate affect the cost of my mortgage?

A higher interest rate can significantly increase your monthly or bi-weekly payment, as well as inflate the term and lifetime cost of your mortgage. Conversely, a lower interest rate can save you tens of thousands of dollars over time.

What’s the difference between a fixed and variable rate?

  • A fixed interest rate is guaranteed to remain unchanged for the length of your mortgage term.
  • A variable interest rate can change during your mortgage term. This will not affect your mortgage payment for the duration of the term, but adjusts what percentage of your payment goes to paying off the mortgage principal.

What controls a variable interest rate?

Your variable interest rate is directly controlled by your lender via their Prime Rate. Each lender can choose to increase or decrease their own prime rate, in turn increasing or decreasing your variable interest rate.

Lenders will usually adjust their prime rate to reflect changes in the Bank of Canada’s Policy Interest Rate. This means that lenders will tend to have similar or identical prime rates. All major Canadian banks currently have a prime rate of 2.45%.

Should I choose a fixed or variable rate?

Variable rates allow you to take advantage of future decreases in interest rate. On the other hand, fixed rates are preferable if interest rates rise in the future. Unfortunately, long-term fluctuations in the prime rate are difficult if not impossible to predict.

However, a 2001 study found that between 1950–2000, choosing a variable interest rate resulted in lower lifetime mortgage cost than a fixed rate up to 90% of the time. According to the study, if you are comfortable with the risks involved, a variable rate may reduce your long-term mortgage cost.

Payment Frequency

The payment frequency determines how often you will make mortgage payments.

What’s the difference between monthly and bi-weekly payment frequency?

  • A monthly mortgage payment is made once per month (12 times per year).
  • A bi-weekly payment is made once every two weeks (26 times per year).

Which payment schedule is right for me?

While we cannot give advice for your specific situation, here are some general guidelines:

  • Most people choose to synchronize their mortgage payments with their monthly or bi-weekly paycheck.
  • Choosing a bi-weekly payment schedule will slightly lower your term and lifetime mortgage cost.

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CMHC Insurance

What is mortgage insurance?

Mortgages with a down payment of less than 20% are required to be insured due to the higher level of risk that they carry. This insurance protects the mortgage lender should you default on the mortgage. Mortgage default insurance does not protect you or help you cover mortgage payments.

The largest provider of mortgage loan insurance in Canada is the Canada Mortgage and Housing Corporation (CMHC), which is owned by the Government of Canada. Some mortgage lenders allow you to go through a private mortgage insurer instead, such as Canada Guaranty or Sagen.

Is mortgage insurance mandatory?

Mortgage default insurance is required for mortgages with a down payment of less than 20% at a federally-regulated mortgage lender, such as at a bank. If you make a down payment that is 20% or larger, then you will not need to get an insured mortgage.

Unregulated lenders, such as private mortgage lenders, may allow you to get an uninsured mortgage with a down payment that is less than 20%.

What mortgages does CMHC insurance not cover?

CMHC insurance will not cover homes with a cost of $1 million or more.

Mortgages with an amortization period greater than 25 years are also not eligible for CMHC insurance.

You can still get CMHC insurance for mortgages with a down payment larger than 20%.

How much is CMHC insurance?

CMHC insurance premiums are a percentage of your mortgage and are paid by your mortgage lender. Provincial sales tax is added to premiums for mortgages located in Ontario, Quebec, Manitoba. and Sadkatachewan.

Premiums start at 2.4% of the mortgage amount for down payments of 20% or less, going up to 4% for a down payment of 5%. While your mortgage lender will pay the insurance premium, they will usually pass this cost indirectly onto you. However, you may still save money after these premiums through lower mortgage rates that insured mortgages usually have.

To find out how much CMHC insurance would cost for your home, visit our CMHC insurance calculator.

CMHC Insurance Premiums

Down PaymentCMHC Insurance Premium
5% - 9.99%4%
10% - 14.99%3.1%
15% - 19.99%2.8%
20% - 24.99%2.4%
25% - 34.99%1.7%
Greater than 35%0.6%

Benefits of CMHC Insurance

CMHC insurance allows you to make a down payment as low as 5% of the value of the home for homes less than $500,000, or 5% on the first $500,000 and 10% on the remainder for homes over $500,000 and less than $1 million.

Since the mortgage is insured, mortgage lenders will often offer lower mortgage rates for insured mortgages.

This calculator is provided for general information purposes only. WOWA does not guarantee the accuracy of the information shown and is not responsible for any consequence that arise from the use of the calculator and its results. Any financing products shown are subject to terms and conditions and may not be available in certain regions.