Mortgage Payment Calculator

A mortgage payment is calculated using the standard loan amortization formula:

Payment = P × [r(1+r)^n] / [(1+r)^n − 1]

Where P is the loan principal (purchase price minus down payment, plus any CMHC premium), r is the monthly interest rate, and n is the total number of monthly payments.

The Canadian wrinkle: semi-annual compounding

Section 6 of Canada's Interest Act requires that interest on fixed-rate mortgages compound semi-annually, not in advance — meaning twice per year rather than monthly. This is unlike most countries where mortgage interest compounds monthly. The practical effect is that the effective annual rate is slightly higher than the quoted rate, but the monthly payment works out slightly lower.

To convert a quoted annual rate to the correct monthly rate for Canadian fixed mortgages, lenders use: r = (1 + annual rate / 2)^(1/6) − 1. A quoted rate of 5.00% compounded semi-annually produces an effective annual rate of approximately 5.06%. Variable-rate mortgages, by contrast, compound monthly, so no conversion is needed.

Canadian mortgage rules set minimum down payments based on the purchase price in tiered brackets. All buyers must meet these minimums regardless of credit score or income:

• 5% of the purchase price on the first $500,000.
• 10% on the portion of the price from $500,000 up to $1,500,000.
• 20% minimum on any home priced above $1,500,000 — these homes cannot be insured.

Putting less than 20% down (on an eligible home) means you must obtain CMHC mortgage default insurance. Your lender is required by law to insure the loan, and the premium is passed on to you. Having at least 20% down is called a "conventional" mortgage and avoids the insurance cost.

On December 15, 2024, the federal government enacted what it called "the boldest mortgage reforms in decades." For Burnaby buyers, two changes stand out:

1. Insured-mortgage cap raised from $1M to $1.5M

Before this change, any home priced at $1,000,000 or more was ineligible for CMHC default insurance, forcing buyers to bring 20% down. The new $1.5M cap means buyers can now purchase homes up to $1,499,999 with as little as the minimum tiered down payment — a significant shift for Burnaby, where many detached homes sit between $1M and $1.5M and a smaller down payment can now open the door.

2. 30-year amortizations for first-time buyers and new builds

Previously, insured mortgages were capped at 25-year amortizations. The reform extended this to 30 years for two groups:

• All first-time home buyers, regardless of down payment amount.
• All buyers of new-build properties (newly constructed homes, presale condos, etc.).

Stretching from 25 to 30 years on a $600,000 mortgage at 4.09% reduces the monthly payment by roughly $200–$250 — meaningful affordability relief, though total interest paid over the life of the loan increases substantially.

CMHC (Canada Mortgage and Housing Corporation) default insurance protects the lender, not the buyer, against default — but the buyer pays the premium. It is mandatory for any insured mortgage (less than 20% down, home ≤$1.5M). The premium is a percentage of the insured loan amount, based on your loan-to-value (LTV) ratio:

• LTV up to 65% (down payment 35%+): 0.60%
• LTV 65.01–75% (down payment 25–34.99%): 1.70%
• LTV 75.01–80% (down payment 20–24.99%): 2.40%
• LTV 80.01–85% (down payment 15–19.99%): 2.80%
• LTV 85.01–90% (down payment 10–14.99%): 3.10%
• LTV 90.01–95% (down payment 5–9.99%): 4.00%

The premium is added directly to the mortgage principal — you do not pay it at closing. In British Columbia, no PST is charged on the CMHC premium. Ontario, Quebec, and Saskatchewan do charge provincial tax on top of it.

OSFI (Office of the Superintendent of Financial Institutions) requires all borrowers at federally regulated lenders to demonstrate they can afford payments at a rate higher than their actual contract rate. The Minimum Qualifying Rate (MQR) is the higher of:

• Your contract interest rate plus 2 percentage points, or
• The floor rate of 5.25%

In practice: if your lender offers you a 5-year fixed at 4.09%, you must qualify at 6.09%. If rates ever drop so your contract rate is 3.00%, you would still qualify at the 5.25% floor. This stress test applies to both insured and uninsured mortgages at federally regulated institutions.

The 2024 renewal exception

One meaningful update from 2024: if you are switching to a new lender at renewal and your loan amount and amortization remain unchanged, you are no longer required to re-qualify under the stress test. This makes it easier to shop around for a better rate at renewal without the barrier of re-testing.

Two pairs of terms confuse almost every first-time buyer. Here is how they differ:

Term vs. amortization

Amortization is the total time it takes to fully repay the mortgage from start to finish — typically 25 years, or up to 30 years for eligible buyers under the December 2024 reforms. This is the number that determines the size of your monthly payment.

Term is the length of your current contract with a specific lender — usually 1 to 5 years. When the term ends, the balance remaining is renewed at then-current market rates. Most Canadians renew three to five times over a 25-year amortization.

Fixed vs. variable rate

• Fixed rate locks your interest rate for the full term. Payments are predictable and do not change when the Bank of Canada moves. Historically popular in Canada; as of late May 2026, best 5-yr fixed insured rates are around 4.04–4.09%.
• Variable rate moves with the lender's prime rate, which tracks the Bank of Canada overnight rate. As of April 29, 2026, the BoC policy rate is 2.25% and prime is 4.45%. Best 5-yr variable rates are around 3.30–3.35%. Variable mortgages compound monthly, so this calculator models them more accurately.

Neither fixed nor variable is universally superior — the right choice depends on your risk tolerance, timeline, and rate outlook. A mortgage broker can model both scenarios for your specific purchase.

Understanding the local price environment helps you set realistic targets before you run the calculator. Based on Greater Vancouver REALTORS (GVR) data for late 2025 and early 2026:

• Detached homes in Burnaby: benchmark in the range of ~$1.9M (approximately 7% below year-ago highs). Well above the $1.5M insured cap — a 20% down payment of ~$380,000+ is required.
• Townhouses: roughly $1.0M–$1.1M, sitting right at the boundary between insured and uninsured territory. The December 2024 reforms mean more townhouses now qualify for insured financing with less than 20% down.
• Condos / apartments: around $700K benchmark, comfortably within insured-mortgage range. A minimum down payment of ~$45,000 (5% of $500K + 10% of $200K) is the legal floor.
• Metro Vancouver composite benchmark: approximately $1.1M as of January 2026.

As a general reference point — rates change daily and this is not a quote:

• Best 5-year fixed (insured): ~4.04–4.09%
• Best 3-year fixed: ~4.04%
• Best 5-year variable: ~3.30–3.35%
• Bank of Canada overnight policy rate (as of April 29, 2026): 2.25%
• Lender prime rate: 4.45%

The BoC's rate decisions directly affect variable-rate mortgages and the trajectory of fixed rates (which track Government of Canada bond yields). You can enter any rate into the calculator above to see how different scenarios affect your payment.