Mortgage Payment Calculator
Simulate your mortgage payment based on price, down payment, rate and frequency. CMHC insurance calculated automatically.
Your Mortgage
Adjust the numbers. Calculations update automatically.
Principal vs Interest by Year
Yearly breakdown of your payments
Amortization Schedule
| Year | Opening Balance | Principal | Interest | Closing Balance |
|---|
How Mortgage Payments Work
Every mortgage payment is split into two parts: the principal (the amount that reduces your debt) and the interest (the cost of borrowing). At the beginning of your mortgage, most of your payment goes toward interest. Over time, the proportion reverses: more and more goes toward principal.
For example, on a $400,000 mortgage at 5% over 25 years, your first monthly payment of $2,326 breaks down as approximately $1,667 in interest and only $659 in principal. After 15 years, the split evens out. This is why the early years are the most expensive in terms of interest.
The Impact of Payment Frequency
Choosing accelerated bi-weekly payments is one of the easiest ways to save on your mortgage. Here's why: instead of 12 monthly payments per year, you make 26 half-payments, which equals 13 monthly payments instead of 12.
On a $400,000 mortgage at 5% over 25 years, switching from monthly to accelerated bi-weekly can save you over $30,000 in interest and shorten your amortization by nearly 3 years. That's free money with no extra effort.
Fixed vs Variable Rates
A fixed rate guarantees the same payment for the entire term (typically 5 years). It provides certainty: you know exactly what you'll pay. A variable rate fluctuates with the Bank of Canada's key interest rate.
Historically, variable rates have been more advantageous over the long term, but with greater volatility. In 2026, with recent rate cuts, variable rates are becoming attractive again. The decision depends on your risk tolerance and budget.
CMHC Insurance Explained
In Canada, if your down payment is less than 20% of the purchase price, you must obtain mortgage loan insurance from CMHC (Canada Mortgage and Housing Corporation), Sagen, or Canada Guaranty. This insurance protects the lender, not you.
Premiums vary based on the loan-to-value ratio:
- 5% down payment (95% LTV): 4.00% premium
- 10% down payment (90% LTV): 3.10% premium
- 15% down payment (85% LTV): 2.80% premium
- 20%+ down payment: no premium required
The premium is added to your mortgage amount. On a $500,000 home with 5% down, the CMHC premium adds $19,000 to your principal. This is why reaching 20% down payment is such an important financial goal.
5 Tips to Pay Off Your Mortgage Faster
- Accelerated bi-weekly payments — The equivalent of a 13th monthly payment per year, without even thinking about it.
- Lump-sum payments — Most mortgages allow you to repay 15-20% of the original principal per year without penalty.
- Increase your payments — Even an extra $50 per month makes a significant difference over 25 years.
- Shorten your amortization at renewal — Switch from 25 to 20 years if your budget allows.
- Shop around for rates — At every renewal, compare at least 3 lenders. A 0.25% difference can represent thousands of dollars.
Frequently Asked Questions
How do you calculate a mortgage payment?
Mortgage payments are calculated using the formula M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the periodic interest rate, and n is the total number of payments. Our calculator handles this automatically based on your chosen frequency.
What is the difference between monthly and bi-weekly payments?
Monthly payments divide the cost into 12 installments per year. Bi-weekly payments make 26 installments, equaling 13 monthly payments. Accelerated bi-weekly payments can save you thousands in interest and shorten your amortization by several years.
Is CMHC insurance mandatory?
Yes, mortgage loan insurance is mandatory in Canada when your down payment is less than 20% of the purchase price. The premium ranges from 2.80% to 4.00% of the loan amount and is added to your mortgage principal.
What is the maximum amortization period?
For insured mortgages (down payment under 20%), the maximum is 25 years. For conventional mortgages (20%+ down), some lenders offer up to 30 years. Longer amortization means lower payments but higher total interest costs.
How can I reduce the total cost of my mortgage?
Increase your down payment to avoid CMHC insurance. Choose accelerated bi-weekly payments. Make annual lump-sum payments. Reduce your amortization period. Shop around for the best rate at every renewal.
Are the results accurate?
This calculator provides accurate estimates based on standard amortization formulas and 2026 CMHC premium rates. Actual results may vary depending on your lender's specific conditions, closing costs, and other applicable fees.
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