Mortgage Rates Calculator Canada

Mortgage Payment Formula:

\[ M = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where \( r = (1 + \frac{i}{2})^{\frac{1}{6}} - 1 \)

Monthly Payment (M):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is a Canadian Mortgage Calculator?

Definition: This calculator computes monthly mortgage payments using Canada's unique mortgage rate calculation method.

Purpose: It helps homebuyers and homeowners estimate their mortgage payments based on Canadian lending standards.

2. How Does the Calculator Work?

The calculator uses the formula:

\[ M = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

\( M \) — Monthly mortgage payment (CAD)
\( P \) — Loan principal amount (CAD)
\( r \) — Effective monthly interest rate
\( n \) — Number of monthly payments (amortization period × 12)

The effective monthly rate is calculated differently in Canada:

\[ r = (1 + \frac{i}{2})^{\frac{1}{6}} - 1 \]

Where \( i \) is the annual interest rate (in decimal).

3. Importance of Mortgage Calculation

Details: Accurate mortgage calculations help borrowers understand their financial commitments and compare different loan options.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate (without % sign), and amortization period in years. The calculator will show monthly payment, total interest, and total payments.

5. Frequently Asked Questions (FAQ)

Q1: Why is Canadian mortgage calculation different?
A: Canadian mortgages use semi-annual compounding, requiring a special formula to convert annual rates to monthly rates.

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 principal and interest. Additional costs would increase your actual payment.

Q4: How accurate is this calculator?
A: It provides accurate estimates for fixed-rate mortgages. Variable-rate mortgages may differ.

Q5: Can I calculate bi-weekly or weekly payments?
A: This shows monthly payments. Divide by 2 for bi-weekly or 4 for weekly approximate payments.