Use this Canadian mortgage calculator to calculate monthly or bi-weekly payments on your mortgage loan. This calculator let you include your CMHC insurance fees (if applicable) into the loan body.
If you are taking mortgage loan in Canada, you’ll probably notice, that they have slightly different wording used in the documents. For instance, loan length called “Amortization” and initial contract period called “Term”. But that’s not all. There are two important differences between the mortgage in U.S. and Canadian mortgage loan:
Canadian mortgage loan compounds interest bi-annually (2 times per year) as opposed to monthly interest compounding in United States (12 times per year). This makes Canadians to pay less every month for the mortgage loan with the same parameters.
Canadian mortgage loan has the “Term” – initial period of time over which you pay specified interest rate. This period typically ranges from six months to ten years tending to be five years in average and it have high influence on the interest rate of Canadian mortgage loan.
Typical amortization of mortgage loan (or scheduled mortgage length) in Canada averaging at 25 years. There are quite strict downpayment requirements and mortgage insurance is very high (up to 3% if you have day job or up to 4.5% if you are self-employed with no proof of income) compared 1-1.5% in U.S.
So, Canadian people paying less for their mortgages?
Well, yes, Canadian people paying less for their mortgage loans. Let’s compare two loan with the same parameters:
Loan Amount: $250,000.00
Loan Length (or Amortization): 25 years
Interest Rate: 6.5%
If you’ll use our standard mortgage calculator (opens in new window) with these values and assume that insurance, property taxes and PMI equals to zero, then you’ll take monthly payment of $1,688.01.
If you’ll scroll this page up slightly, you’ll see that Canadian mortgage calculator would give you $1,674.55 as a monthly payment, thus, the difference between monthly payments for a given mortgage loan would be $13.46 per month. This doesn’t seems to be alot, but it would give us the difference of $4,038.00 over the whole amortization period of 25 years (or 300 months).
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