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?+
CMHC insurance is required when your down payment is less than 20% of the purchase price. The premium ranges from 2.8% to 4% of the mortgage amount depending on your down payment percentage, and is added to your mortgage balance.
What is the maximum amortization period in Canada?+
For insured mortgages (less than 20% down payment), the maximum amortization is 25 years. For uninsured mortgages (20% or more down), lenders may allow up to 30 years, though this varies by lender.
Is bi-weekly or monthly payment better?+
Bi-weekly payments (26 payments per year) result in the equivalent of one extra monthly payment per year, which can shave years off your amortization and save thousands in interest. However, monthly payments are easier to budget around other monthly bills.
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.