How is a Canadian mortgage payment calculated?+
Canadian mortgage payments are calculated using a compound interest formula where interest compounds semi-annually (not monthly like in the US). The payment depends on your mortgage amount, interest rate, amortization period, and payment frequency.
What is CMHC mortgage insurance and when do I need it?+
Mortgage default insurance is generally required when your down payment is less than 20%. Standard CMHC homeowner premiums range from 2.8% to 4.0% at common high-ratio loan-to-value levels, and an amortization beyond 25 years is subject to an additional 0.20% surcharge. The premium is usually added to the mortgage balance.
What is the maximum amortization period in Canada?+
For most insured mortgages, the maximum amortization is 25 years. Eligible first-time home buyers and buyers of newly built homes may qualify for a 30-year insured amortization under current mortgage-insurance rules. With 20% or more down, some lenders also offer amortizations up to 30 years, subject to lender policy.
Is bi-weekly or monthly payment better?+
Regular bi-weekly payments are normally the monthly payment multiplied by 12 and divided by 26, so they do not automatically create an extra monthly payment each year. Accelerated bi-weekly payments are usually one-half of the monthly payment every two weeks, which is the option that creates the equivalent of about one extra monthly payment per year.
Does property tax get included in my mortgage payment?+
In Canada, property tax is typically paid separately to your municipality. However, some lenders collect property tax as part of your mortgage payment and remit it on your behalf. This calculator shows both your principal & interest payment and your estimated property tax separately.