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: January 29, 2025 Bank of Canada announcement
February 2025: Mortgage market update
2024 was a relatively slow year for the Canadian housing market, with buyers hunkered down and waiting for lower mortgage rates. With the Bank of Canada having implemented its sixth policy rate cut in a row (after not having one since March 2020), taking the target for the overnight rate from 3.25% to 3.00%, home sales have started 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 Bank’s sixth rate cut. As a result, some lenders have reduced their fixed mortgage rates.
Still, though, from a historical perspective, both fixed and variable mortgage rates continue to be elevated. If you’re looking for a mortgage rate in Canada, read on for some key information.
- Real estate update: On February 18, 2025, the Canadian Real Estate Association (CREA) reported a subdued start to the year for Canadian housing, as U.S. tariff concerns tempered earlier expectations of a busy January. Total sales hit 26,650 units, a 3.3% dip from December but 2.9% higher than in January 2024. On the supply side, sellers listed 83,450 new homes, marking an 11% monthly increase and a 22.7% annual jump, one of the largest month-on-month increases in decades. This surge also pushed the months of inventory to 4.2, giving buyers more choice and easing pricing pressures. The sales-to-new-listings ratio (SNLR) dropped to 49.3%, placing the market at the lower end of balanced territory and improving market conditions for buyers. National home prices remained in check, with an average increase of 1.1% year-over-year to $670,064. According to CREA analysts, the late-January dip in demand comes on the heels of potential US tariffs. This uncertainty may continue to influence buyer confidence and offset the affordability gains expected from Bank of Canada rate cuts.
Read more- Canadian real estate sales drop in January due to tariff fears
- CPI update: Statistics Canada’s latest Consumer Price Index (CPI) report, released on February 18, 2025, shows that Canada’s annual inflation rate rose to 1.9% in January 2025, up from 1.8% in December 2024. Although this headline figure remains within the Bank of Canada’s 2% target, much of the inflationary pressure was obscured by a temporary GST tax holiday that helped lower prices on items such as alcoholic beverages, restaurant meals, and children’s products. Without this tax break, underlying inflation would have been closer to 2.6%. Mortgage interest costs, which account for roughly 30% of the overall CPI, moderated to a 10.2% year-over-year increase, reflecting the impact of recent rate cuts by the Bank of Canada. Rent prices also showed a modest improvement for the first time since 2023, declining by 0.1% from December but still staying 6.3% higher than last year. Core inflation measures, including both the CPI trim and CPI median, edged up to 2.7%, indicating that underlying price pressures continue to persist. In light of these recent readings and the potential for new U.S. tariffs on Canadian exports to drive prices higher, economists now expect the Bank of Canada to hold its benchmark rate steady at its upcoming policy meeting on March 12.
Highlights from the Bank of Canada’s January 29, 2025 announcement
On January 29, 2025, the Bank of Canada (BoC) cut its Overnight Lending Rate by 0.25%, bringing it to 3.00%. This marks the sixth consecutive rate cut since June 2024, part of the bank’s broader effort to ease borrowing costs. The BoC’s rate-cut cycle, which has lowered the Overnight Lending Rate by 200 basis points since June, comes after aggressive rate hikes in 2022-2023 to combat inflation.
- The rate cut was widely expected after December’s inflation report showed the headline rate easing to 1.8%. The BoC has based its policy outlook on a scenario without U.S. import tariffs, a projected GDP growth of 1.8% in 2025, and inflation near the 2% target.
- Borrowers with variable-rate mortgages and home equity lines of credit (HELOCs) will see lower borrowing costs as the prime rate at most lenders will drop to 5.2%. For adjustable-rate mortgage holders, this will mean reduced monthly payments. For fixed-payment variable mortgage holders, more of their payments will go toward the principal, reducing their overall loan balance faster.
- While the BoC’s rate cut does not directly affect fixed mortgage rates, the bond market has responded with 5-year bond yields dropping to 2.87%. This could lead to modest discounts on fixed-rate mortgages in the coming days.
- Lower interest rates will also reduce costs for personal loans, car loans, and lines of credit, making borrowing more affordable. However, savers will see lower returns on high-interest savings accounts (HISAs) and Guaranteed Investment Certificates (GICs).
- The BoC signaled a more gradual pace of rate cuts moving forward, with expectations of two additional quarter-point reductions in 2025. However, if the proposed 25% U.S. import tariffs are implemented, the central bank may need to adjust its strategy to address inflationary pressures.
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