🏠 Mortgage Calculator
Monthly payment with taxes, insurance and full amortization table
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About this calculator
Your monthly mortgage payment depends on more than just the loan: this calculator combines principal and interest with property tax and home insurance for the true monthly number. Enter your home price, down payment, rate, and term to see the payment breakdown plus a year-by-year amortization table showing how each payment splits between principal and interest.
Tip: extra principal payments early in the loan save far more interest than the same dollars paid later, because early payments shrink the balance that all future interest is charged on.
What the payment number does not tell you
Your monthly payment is the figure everyone shops by, but it hides the real price of the loan: the total interest. Early in an amortization schedule, most of each payment is interest. On a $480,000 mortgage at 4.5 percent, the first payment sends roughly $1,780 to interest and only about $875 to principal. That split improves slowly, which is why extra payments made in the early years do far more damage to the balance than the same dollars sent a decade later. It also pays to judge a mortgage over the term you will actually hold it, not the full amortization. Most Canadian borrowers move, refinance, or renegotiate by renewal time, so the cost across one five year term, including penalty risk, often matters more than the 25 year total.
A worked example
Say you buy a home for $600,000 with 20 percent down, so you borrow $480,000. Take a five year fixed rate of 4.5 percent and a 25 year amortization. Canadian fixed rates compound semi-annually, which makes the monthly rate slightly lower than one twelfth of the quoted rate. The payment works out to $2,656.67. Held for the full 25 years, you would pay $797,001 in total, which means $317,001 of interest, nearly two thirds of the amount you borrowed.
Now add $200 a month in prepayments from the first payment onward. The balance falls fast enough that the mortgage is gone in 22 years instead of 25, and the interest bill drops by $42,935. No raise and no lump sum, just $200 pointed at principal early and often.
With only 10 percent down, a second cost appears. The loan is $540,000, and because the down payment is under 20 percent, CMHC mortgage insurance is mandatory. At that loan size the premium is 3.10 percent, or $16,740. The premium is added to your balance, so you start out owing $556,740 and pay interest on the insurance itself.
Where borrowers get caught
- Forgetting the stress test. You must qualify at the higher of your contract rate plus 2 percent or the federal benchmark rate, so the home you can comfortably carry is not always the home a lender will approve.
- Comparing quoted rates directly. Semi-annual compounding means the quoted rate is not quite the effective rate, and two lenders at the same number can still differ sharply on penalties and prepayment room.
- Choosing by payment alone. Stretching the amortization lowers the payment but adds years of interest. The smallest payment is rarely the cheapest mortgage.
- Underestimating the insurance premium. A smaller down payment feels easier at purchase time, but the premium and the interest charged on it can add five figures to the true cost.
Frequently asked questions
How much income do I need to afford a house in Canada?
Lenders apply the stress test, checking that you could still pay at the higher of your contract rate plus 2 percent or the federal benchmark rate. They also cap the share of gross income going to housing at roughly a third, and total debt payments at roughly 44 percent. A broker can run your exact figures before you start shopping.
Is a shorter amortization always better?
It cuts total interest sharply, but the higher required payment leaves less room in a tight month. Many borrowers take a 25 year amortization and then use prepayment privileges voluntarily, keeping the lower required payment as a safety valve during a job loss, a parental leave, or a stretch of reduced hours.
What does CMHC insurance actually protect?
It protects the lender, not you. If you default and the home sells for less than the loan balance, the insurer covers the lender's shortfall. You pay the premium because that protection is what allows a lender to offer you a mortgage with as little as 5 percent down.
How much can prepayments really save?
More than most people expect, because early payments are mostly interest. In the example on this page, an extra $200 a month on a $480,000 mortgage saved $42,935 and cleared the loan three full years early. Even one modest annual lump sum measurably shortens the road to owning outright.