Question 1

Why does a Canadian mortgage compound differently than a US one?

Accepted Answer

Canadian federal law requires fixed-rate mortgages to compound semi-annually, not in advance — a rule with roots going back to 19th-century interest-rate legislation. US mortgages, by contrast, compound monthly to match the monthly payment cycle. The practical effect: a Canadian mortgage's quoted nominal rate produces a slightly higher effective annual rate than the same number would on a US loan, purely from how the compounding periods are defined.

Question 2

What is CMHC insurance and why do I have to pay it?

Accepted Answer

The Canada Mortgage and Housing Corporation insures lenders against default on "high-ratio" mortgages — any purchase with less than 20% down. Since the lender is taking on more risk with a smaller down payment, the borrower pays a one-time premium (typically rolled into the loan balance) that scales down as your down payment climbs from 5% toward 20%. Put 20% or more down and no CMHC premium applies at all.

Question 3

What's the difference between bi-weekly and accelerated bi-weekly?

Accepted Answer

Regular bi-weekly just takes your monthly payment, multiplies by 12, and divides by 26 — same total paid per year as monthly, just in smaller, more frequent chunks. Accelerated bi-weekly instead takes half your monthly payment every two weeks, which works out to 26 half-payments a year — the equivalent of one extra full monthly payment annually, shaving real time and interest off your amortization.

Question 4

What down payment do I actually need in Canada?

Accepted Answer

The federal minimum is 5% on the first $500,000 of a home's price (with higher tiers above that), and CMHC insurance is mandatory on anything under 20% down. Putting down at least 20% avoids the insurance premium entirely and is often called a "conventional" mortgage as opposed to a "high-ratio" one.

Question 5

Does the amortization period have to match the mortgage term?

Accepted Answer

No — Canadian mortgages separate the two. The amortization period (commonly 25 years) is how long it would take to fully pay off the loan at the current rate; the term (commonly 3-5 years) is how long your current rate and lender agreement actually lasts before you have to renew, often at a different rate. This calculator models the full amortization period, which is what a lender uses to size your payment.

Period	Payment	Principal	Interest	Balance
Year 1	$33,983	$8,975	$25,008	$454,975
Year 2	$33,983	$9,475	$24,508	$445,500
Year 3	$33,983	$10,003	$23,979	$435,497
Year 4	$33,983	$10,561	$23,422	$424,935
Year 5	$33,983	$11,150	$22,833	$413,785
Year 6	$33,983	$11,772	$22,211	$402,014
Year 7	$33,983	$12,428	$21,555	$389,586
Year 8	$33,983	$13,121	$20,862	$376,465
Year 9	$33,983	$13,853	$20,130	$362,612
Year 10	$33,983	$14,625	$19,358	$347,987
Year 11	$33,983	$15,440	$18,543	$332,547
Year 12	$33,983	$16,301	$17,682	$316,245
Year 13	$33,983	$17,210	$16,773	$299,035
Year 14	$33,983	$18,170	$15,813	$280,865
Year 15	$33,983	$19,183	$14,800	$261,682
Year 16	$33,983	$20,252	$13,731	$241,430
Year 17	$33,983	$21,382	$12,601	$220,048
Year 18	$33,983	$22,574	$11,409	$197,475
Year 19	$33,983	$23,832	$10,151	$173,642
Year 20	$33,983	$25,161	$8,822	$148,481
Year 21	$33,983	$26,564	$7,419	$121,917
Year 22	$33,983	$28,045	$5,938	$93,872
Year 23	$33,983	$29,609	$4,374	$64,263
Year 24	$33,983	$31,260	$2,723	$33,003
Year 25	$33,983	$33,003	$980	$0

Canadian Mortgage Calculator — Built for Canada's Rules

🍁 Canadian Mortgage

📅 Amortization Schedule

What Makes a Canadian Mortgage Different

📐 Semi-Annual Compounding

🛡️ CMHC Default Insurance

📅 Amortization vs Term

⚡ Accelerated Payments

Frequently Asked Questions

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