Question 1

How is a Canadian mortgage payment calculated?

Accepted Answer

For a typical Canadian fixed-rate mortgage, the quoted nominal annual interest rate is converted using semi-annual compounding, then applied to the selected monthly amortization schedule. This differs from the monthly-compounding convention commonly used by US calculators.

Question 2

What is the minimum down payment in Canada?

Accepted Answer

For an eligible owner-occupied home below $1.5 million, the federal minimum is 5% of the first $500,000 plus 10% of the portion from $500,000 to $1.5 million. A home priced at $1.5 million or more generally requires at least 20% down because it is outside the insured-mortgage price cap.

Question 3

How does the Canadian mortgage stress test work?

Accepted Answer

Federally regulated lenders generally qualify borrowers at the higher of 5.25% or the negotiated contract rate plus 2 percentage points. The test applies to both insured and uninsured mortgages, subject to specific renewal and switching rules.

Question 4

When is mortgage default insurance required?

Accepted Answer

Mortgage loan insurance is generally required when the down payment is below 20% on an eligible property. The premium depends on loan-to-value and can normally be added to the mortgage, although applicable provincial tax on the premium cannot be added.

Question 5

Can every Canadian borrower choose a 30-year insured amortization?

Accepted Answer

No. Thirty-year insured amortizations are available to eligible first-time homebuyers and buyers of newly constructed homes. Other borrowers with high loan-to-value insured mortgages may be limited to a 25-year amortization.

Canadian Mortgage Calculator

Property and mortgage

Qualification inputs

Federal stress-test estimate

What this Canadian mortgage calculator includes

How to read the stress-test result

Primary sources

Canadian Mortgage Calculator — Frequently Asked Questions