Budget Beavers Mortgage Calculator Canada
Semi-annual compounding (Interest Act), CMHC insurance, OSFI stress test, amortization schedule.
Inputs
OSFI B-20: qualifying rate = max(contract + 2%, 5.25%)
Amortization Schedule
Renewal in 5 years
The math behind your result
Every number on this page is derived from the exact Canadian regulatory formula — not approximations or estimates. The calculation runs entirely in your browser using the inputs you provided. Expand the section below to verify the math step-by-step, or share the URL to reproduce these exact results.
▶ How is this calculated?
1. Semi-annual compounding (Canadian Interest Act)
Canadian fixed mortgages are compounded semi-annually, not monthly. This is mandated by the
Interest Act (R.S.C. 1985, c.I-15, s.6). US calculators that use r/12 are wrong for Canada.
Effective monthly rate: r = (1 + annualRate / 2)^(2/12) - 1 Example at 5.49%: r = (1 + 0.0549/2)^(1/6) - 1 = 0.004524 (0.4524%/month) US r/12 = 0.004575 — different, and wrong for Canada
2. Payment formula (PMT)
P = L × r × (1+r)^N / ((1+r)^N - 1) where: L = mortgage principal r = effective period rate (from step 1) N = amortization years × payments per year
3. CMHC insurance premium
Down payment % | Premium rate (on loan amount) -----------------|-------------------------------- 5.00 – 9.99% | 4.00% 10.00 – 14.99% | 3.10% 15.00 – 19.99% | 2.80% ≥ 20.00% | 0% (conventional, no insurance) Max insurable: $1,500,000 (raised Dec 2024) Source: CMHC, Homeowner Mortgage Loan Insurance, 2024
4. Stress test (OSFI B-20)
Qualifying rate = max(contractRate + 2%, 5.25%) GDS = (monthly mortgage + tax + heat + 50% condo) / (grossIncome / 12) TDS = (GDS numerator + other monthly debts) / (grossIncome / 12) Pass: GDS ≤ 39% AND TDS ≤ 44% Source: OSFI Guideline B-20, amended Jan 2018, last updated 2023
About the Canadian Mortgage Calculator
Why Canadian mortgages are different from US mortgages
The most important difference: Canadian fixed-rate mortgages are compounded semi-annually, not monthly.
This is mandated by the Interest Act (R.S.C. 1985, c.I-15, sections 6 and 10), which requires
that mortgage rates be stated on a semi-annual not-in-advance basis. Every US calculator — and many
Canadian ones that are secretly US reskins — use monthly compounding (r/12), producing
a slightly higher payment that overstates the true Canadian cost. The difference on a $600,000 mortgage
at 5.49% is about $22/month, or roughly $6,600 over 25 years. Not trivial.
How CMHC mortgage insurance works
If your down payment is less than 20% of the home's purchase price, federal law (the Protection of Residential Mortgage or Hypothecary Insurance Act) requires your mortgage to carry default insurance through CMHC, Sagen, or Canada Guaranty. CMHC is the most common. The premium is added directly to your mortgage principal — it's not paid at closing in most provinces (Quebec, Ontario, Saskatchewan, and Manitoba charge PST on the premium in cash at closing; the premium itself is still financed).
As of December 2024, CMHC raised the maximum insurable purchase price from $1,000,000 to $1,500,000, allowing buyers in Canada's most expensive cities to access insured mortgages with less than 20% down on higher-priced homes for the first time.
The OSFI stress test
Since January 2018 (updated 2023), all federally regulated lenders (major banks, credit unions federally regulated, trust companies) are required by the Office of the Superintendent of Financial Institutions (OSFI) to qualify borrowers at the greater of: their contract rate plus 2%, or 5.25% — whichever is higher. As of 2025 at rates near 5.5%, the qualifying rate is typically 7.5%.
The GDS (Gross Debt Service) ratio must stay at or below 39%, and the TDS (Total Debt Service) ratio at or below 44%. GDS includes your mortgage payment, property tax, heating, and 50% of condo fees. TDS adds all other monthly debt obligations (car loans, student loans, credit cards, etc.) on top.
Term vs amortization — a uniquely Canadian distinction
In the US, a "30-year mortgage" usually means a fixed rate for 30 years. In Canada, most mortgages have a 5-year term within a 25-year amortization period. Your rate is only locked in for the term; at term-end you must renew at whatever rate is available. This is why "renewal shock" — when your renewal rate is higher than your original rate — was a major concern in 2023–2026, when roughly 2.2 million Canadian households renewed mortgages taken out in the ultra-low-rate 2020–2021 period.
Why US calculators get Canadian mortgages wrong
When you search "mortgage calculator" on Google, most page-1 results are US-built tools that: (1) use monthly compounding instead of semi-annual, (2) include mortgage interest deductibility (which doesn't exist in Canada for principal residences), (3) don't have CMHC (they have PMI, which is a monthly payment, not a lump-sum premium added to the mortgage), and (4) don't know about the OSFI stress test. The calculation on this page uses the correct Canadian formulas throughout.
Not financial advice. This calculator provides estimates for informational and educational purposes only. Mortgage rates, CMHC premium rates, and stress test thresholds can change. Always consult a licensed mortgage broker or bank before making a financial decision. All calculations happen in your browser — no input data is sent to any server.
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