Mortgage Payment Calculator Canada
Get a sense for your mortgage payments, the cash you'll need to close and the monthly carrying costs with Ratehub.ca’s mortgage payment calculator.
WATCH: How to take advantage of future lower rates
Frequently Asked Questions
How do I use the mortgage payment calculator?
Why does the down payment automatically change on the calculator?
How much is the mortgage payment of $500,000 for 30 years?
What is an amortization schedule?
Are mortgage payments due every month?
How do I calculate monthly payments on a mortgage?
Does the calculator factor in land transfer tax rebates
Are closing costs included in my mortgage payment result?
Why does the Land Transfer Tax output change when I select Toronto, Ontario, as my purchase location?
Find the right calculators for all your mortgage and home buying needs
WATCH: March 12, 2025 Bank of Canada announcement
March 2025: Mortgage market update
2025 has been a relatively slow year for the Canadian housing market, with buyers hunkered down due to the new U.S. tariff threats. With the Bank of Canada having implemented its seventh policy rate cut in a row, taking the target for the overnight rate from 3.00% to 2.75%, home sales might start rebounding.
Variable mortgage rates also fell in line with the policy rate. With more rate cuts expected in 2025, further downward pressure on mortgage rates is anticipated. Fixed mortgage rates are tied to the bond market, and bond yields dropped in the wake of the tariff-related uncertainty. As a result, some lenders have reduced their fixed mortgage rates.
If you’re looking for a mortgage rate in Canada, read on for some key information.
- Real estate update: Canada’s housing market continued to cool in February 2025, as home sales dropped 9.8% from January and 10.4% year over year. According to the Canadian Real Estate Association (CREA), only 32,195 houses changed hands in February. CREA’s Senior Economist Shaun Cathcart noted that a gap opened between home sales recorded this year and last ever since the U.S. tariffs were announced in January, and this trend continued to widen throughout February. At the same time, new listings fell by 12.7% month over month, as sellers hesitated to enter the market amid ongoing volatility. However, overall inventory levels continued to rise from 4.1 months of supply in January to 4.7 months in February. The sales-to-new-listings ratio (SNLR) slightly inched up to 49.9%, maintaining a balanced market, though sales remain well below typical levels. With fewer buyers in the market, home prices declined, with the national average falling to $668,097 — a 3.3% drop from last year This price cooling trend and falling mortgage rates are improving affordability for buyers. The Bank of Canada’s seven consecutive rate cuts have lowered its benchmark rate to 2.75%, leading to variable mortgage rates as low as 3.95%. Even fixed rates have fallen to 3.89%, given the drop in five-year bond yields. Looking ahead, CREA notes that the market remains in flux, with economic concerns and affordability improvements pulling in opposite directions.
Read more- Canadian home sales plunge 10% in February due to tariff fears
- CPI update: Canada’s inflation rate rose to 2.6% in February, reaching its highest level in eight months, according to Statistics Canada’s latest Consumer Price Index (CPI) report. The increase was largely due to the end of the federal tax holiday on February 15, which reinstated GST and HST on previously exempt items. However, inflation pressures extended beyond the tax changes because the CPI still rose 0.4% even after adjusting for the tax impact. Several sectors experienced notable price jumps like travel tour prices that spiked 18.8% year-over-year and passenger vehicle insurance premiums rose 7.5%. However, gas price growth slowed to 5.1% and shelter costs also continued to moderate, with mortgage interest costs rising 9% annually. Rent price growth also showed signs of slowing, increasing 5.8% year-over-year. Core inflation remained elevated with the CPI median and CPI trim both climbing to 2.9% from 2.7%. Meanwhile, concerns over potential U.S. tariffs on Canadian exports are growing, with businesses and consumers expecting additional price increases. Economists now believe the BoC could pause rate cuts in the coming months as it assesses the risk of rising prices against the need to support economic growth.
Read more: February CPI shoots to 2.6% following end of tax holiday
Highlights from the Bank of Canada’s March 12, 2025 announcement
On March 12, 2025, the Bank of Canada (BoC) lowered its benchmark interest rate by 0.25%, bringing it down to 2.75%. This marks the seventh consecutive cut since June 2024, resulting in a total rate decrease of 2.25% from its peak of 5%.
- Although Canada began 2025 with strong GDP growth and inflation close to the Bank’s 2% target, persistent volatility from U.S. trade policies has prompted the BoC to continue its rate-cutting cycle.
- The rate cut directly lowers borrowing costs for those with variable-rate mortgages. With the prime rate at most lenders dropping to 4.95%, average Canadian variable mortgage holders can expect a reduction of about $84 in their monthly payments.
- Fixed mortgage rates, while not directly tied to the BoC’s benchmark rate, have also declined recently due to bond yields falling to around 2.6%. As a result, the lowest five-year fixed mortgage rate available is now 3.89%.
- Interest rates on other variable-rate products, such as personal loans, car loans, and lines of credit, will also decrease, offering consumers additional relief. However, savers will experience lower returns on high-interest savings accounts (HISAs) and Guaranteed Investment Certificates (GICs).
- The BoC noted that more rate cuts may be on the horizon if U.S. tariff tensions continue. Governor Tiff Macklem stressed that monetary measures alone cannot fully mitigate the negative economic effects of trade tensions, calling instead for fiscal support from government.
Canadian housing market forecast for 2025
The Canadian Real Estate Association (CREA) has released its 2025 forecast, highlighting a recovery fueled by pent-up demand, reduced borrowing costs, and a seasonal surge in listings. The strong market activity observed in late 2024, driven by significant rate cuts by the Bank of Canada, provides a preview of what’s expected this year. Residential sales are forecast to rise to 532,704 in 2025, an 8.6% increase from 2024 and exceeding the earlier projection of 6.6%. By 2026, sales are expected to grow another 4.5% to 556,662. Average home prices are projected to increase by 4.7% year-over-year to $722,221 in 2025, with a further 3.3% rise to $746,379 in 2026. Regional differences will also impact market activity. British Columbia and Ontario anticipate strong sales growth due to higher supply and lower current sales, while Alberta and Saskatchewan are expected to see price-driven demand due to low inventory and affordability.
Canadian mortgage reform update
On September 16, 2024, the federal government announced sweeping changes to mortgage qualification rules for first-time home buyers, as well as those purchasing newly-constructed homes.
As of December 15, 2024:
- 30-year amortizations are available for all first-time home buyers, regardless of whether they have an insured mortgage. These extended amortizations are also available for any purchase of new construction.
- The maximum purchase price for an insured mortgage (where less than 20% down is paid) is $1.5 million, from the previous $1 million.
These are some of the most impactful mortgage reforms announced since 2012, and are anticipated to increase first-time home buyers’ affordability and access to the housing market.
Learn more about these new mortgage rule changes in the video below.
WATCH: 2025 mortgage rule changes for homebuyers
Why use a mortgage payment calculator?
When planning to buy a home, it's easy to focus on the final purchase price or your mortgage amount. But actually, the most relevant number to you will be your regular repayment. After all, your mortgage payments are the amount that you'll need to take from your paycheque each month.
What is a mortgage payment?
Your mortgage payment is the amount of money you must pay every month to pay down, and ultimately pay off, your mortgage loan. Your mortgage payment covers both the principal (the actual amount of the loan) and the interest on the loan. It can also include mortgage default insurance, also sometimes known as CMHC insurance (required when your down payment is less than 20% of the cost of your home), property taxes and other fees. When you first begin making payments, more of it goes towards covering interest, but over time, more of your payment will eventually go to paying down your mortgage balance.
What are some factors that can affect your mortgage payments?
There are several key factors that can affect the size of your mortgage payments. Some of these include:
- Your home price: This dictates how much you will need to borrow.
- Your down payment: The more you are able to pay up front towards the purchase of your home, the smaller your required mortgage amount. In turn, the smaller your monthly mortgage payment will be.
- Your total mortgage amount: This is the price of your new home, less the down payment, plus mortgage insurance, if applicable.
- Your interest rate: The lower the interest rate on your mortgage, the lower your monthly payments will be. Ratehub.ca can help you find the best mortgage rates available today to keep your payment as low as possible. When choosing between a variable or fixed mortgage rate, generally speaking, variable rates provide lower mortgage payments as they tend to be lower. According to a landmark 2001 study, historically, over 90% of Canadians who have maintained a variable mortgage rate throughout their entire mortgage term have paid less in interest than those who have stuck to a fixed rate. However, if you seek stability throughout your mortgage term, a fixed rate may be more suitable for you.
- Your amortization period: Your amortization period is the length of time it takes to pay off your entire mortgage. The longer your amortization period is, the lower your monthly mortgage payments will be. That said, since it will take you a longer time to pay off your mortgage, you will end up paying more in interest.
How do I get approved for a mortgage?
When thinking about your monthly mortgage payments, it’s also important to consider what you’ll need in order to get approved for a mortgage. Here are some of the most important things that prospective lenders will want to see:
- A good credit score: You need a credit score of 680 or higher to qualify for the best mortgage rates that allow for the lowest monthly mortgage payments. To qualify for any mortgage at all, you’ll need a credit score of at least 560. Read more on how your credit score affects your ability to get approved for a mortgage.
- Proof of income: You’ll need to provide proof of income in the form of pay stubs and/or tax documents like your Notice of Assessment (NOA). If you recently started a new job, even with proof of income, many lenders will want to see that you’ve held the position for at least a year.
- Ability to pass a mortgage stress test: You will need to pass a mortgage stress test, which ensures that you can still afford your mortgage payments at a rate known as the “qualifying rate”, set by the Office of the Superintendent of Financial Institutions (OSFI), or your contract rate + 2%, whichever is the higher of the two.
- Down payment: The size of your down payment affects the house you can afford as well as the size of your mortgage and associated monthly payments. As well, it affects whether you will need to purchase mortgage default insurance, which is required if your down payment is less than 20% of the value of the home you are purchasing. The minimum down payment you’ll need to have depends on the home you’re looking to buy:
|
Purchase Price |
Minimum Down Payment |
|
Less than $500,000 |
5% |
|
$500,000 - $1,499,999 |
5% of the first $500,000 and 10% of any amount over the first $500,000 |
|
$1,500,000 or more |
20% |
Compare current mortgage rates across the Big 5 Banks and top Canadian lenders. Take 2 minutes to answer a few questions and discover the lowest rates available to you.
How to lower your mortgage payments
There are a few ways to lower your monthly mortgage payments. You can reduce the purchase price, make a bigger down payment, extend the amortization period or find a lower mortgage rate. Use the calculator to see what your payment would be in different scenarios.
Keep in mind that if your down payment is less than 20%, your maximum amortization period is 25 years. As for finding a lower mortgage rate, it’s always a good idea to speak to a mortgage broker for assistance.
How can you pay off your mortgage faster?
If you are able to pay your mortgage off faster, it can save you thousands of dollars in interest. However, any of the methods required to pay off your mortgage faster will result in larger monthly payments on your part, albeit for a shorter period of time. Be aware that some lenders may include pre-payment penalties with your mortgage, so it’s important to understand the fine print. That said, some of the ways you can pay off your mortgage more quickly include:
- Accelerate your mortgage payment schedule: Switch to a more frequent payment plan. For example, if you were making payments on a monthly basis, you may want to consider paying on a bi-weekly basis.
- Increase the amount of your mortgage payments: Any increase in the amount you are paying towards your mortgage on a monthly basis will speed up the time it takes to pay off your mortgage.
- Make a lump sum payment: If you receive a lump sum such as a tax refund, inheritance, a bonus, etc., and you can afford it, apply that lump sum towards your mortgage payments.
More mortgage calculators
For further information, check out these helpful pages!
- Best Mortgage Rates in Canada
- Variable or Fixed Mortgage Rates
- Amortization
- Mortgage Default Insurance (CMHC Insurance)
- Open vs. Closed Mortgage: What's the Difference?
- Mortgage Terms Glossary
- Mortgages