1. What is a Canadian Mortgage Payment Calculator?

Definition: This calculator computes the monthly mortgage payment according to Canadian compounding rules (semi-annual compounding).

Purpose: It helps Canadian homebuyers and homeowners estimate their mortgage payments accurately.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( M \) — Monthly payment (CAD)
• \( P \) — Principal amount (CAD)
• \( r \) — Effective monthly interest rate (decimal)
• \( n \) — Total number of payments (term in years × 12)
• \( i \) — Annual interest rate (decimal)

Explanation: The formula accounts for Canadian mortgage rules where interest is compounded semi-annually but payments are made monthly.

3. Importance of Accurate Mortgage Calculation

Details: Proper mortgage calculation ensures borrowers understand their financial commitments and can budget accordingly.

4. Using the Calculator

Tips: Enter the principal amount, annual interest rate (as a percentage), and amortization period in years. All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: Why is Canadian mortgage calculation different?
A: Canadian mortgages use semi-annual compounding by law, requiring a special calculation method.

Q2: What's a typical amortization period in Canada?
A: Most Canadian mortgages have 25-year amortization, though other terms (15-30 years) are available.

Q3: Does this include property taxes or insurance?
A: No, this calculates only the principal and interest portion of your payment.

Q4: How often are payments typically made?
A: While monthly is most common, Canadian mortgages can also have bi-weekly or weekly payments.

Q5: What's the difference between term and amortization?
A: Amortization is the total repayment period, while term is the length of your current contract (typically 1-5 years).