Mortgage calculator

Last updated: January 18, 2022

What this tool is all about:

Use the mortgage payment calculator to run different scenarios and find out how much your mortgage payment will be. Customize variables such as the down payment amount, mortgage rate, payment frequency, amortization, and choose between fixed or variable rate, to see the effects on your mortgage payment in Canada.

Before buying a property, it’s important to understand your carrying costs to ensure you can afford to commit to the purchase. This mortgage calculator will help you visualize your mortgage balance over time and offer insights on how to minimize the amount of interest you pay by making prepayments on your mortgage principal.

Disclaimer: Perch does not guarantee the accuracy of these results and should not be treated as a recommendation. Consult a professional prior to making any decisions as it relates to your current or future real estate transactions. Please refer to our Terms of Use for more information.

The mortgage calculator is an important tool to help you with understanding exactly what you can afford. Buying a home can be a daunting and financially intimidating task, so we have built this simple tool so you can see exactly how it will impact your monthly, semi-monthly, bi-weekly or weekly household budget. As you go through the house-hunting process, you can bookmark this page to quickly calculate the mortgage payment on any potential house purchase. Even if you’re not currently looking at properties, you can use this calculator for any property value amount just to see what the mortgage payment is like. An online mortgage affordability calculator can help reduce unwelcome surprises to your budget later.

The mortgage payment formula includes these key numbers:

Total mortgage amount: This is the amount you are borrowing from the lender when you originally start your home loan, also known as the principal. It’s the price you paid (or plan to pay) on a property, less your down payment plus any applicable mortgage loan (or CMHC) insurance premiums.

Amortization period: The amortization period is the total length of time it takes you to pay off the entire loan. A typical mortgage in Canada has a 25-year amortization period. You can save money and reduce the amount of interest you pay on a mortgage by making prepayments to pay off your loan faster.

Mortgage rate: The mortgage rate is the rate of interest charged on a mortgage for a particular term (usually 5 years), and is set by the lender. A mortgage rate can be fixed, meaning it stays the same throughout the term, or variable, which means it can fluctuate with a benchmark interest rate.
To use the calculator, input the property value (also known as the purchase price), amount of your down payment, and mortgage rate. If you already own your home, you would enter your estimated property value today as the purchase price and the equity in your home (value minus mortgage amount) as the down payment.

If you’re not sure what to enter for these inputs, you can visit our rates page or open a Perch account to see what mortgage offers are available to you and what your estimated property value is.

The amortization schedule or amortization table shows your remaining mortgage balance over time. Every time you make a mortgage payment, some of that money goes towards paying the mortgage interest and the rest goes towards reducing your mortgage principal or loan amount. Eventually, your mortgage principal will reach zero, meaning you no longer owe money to the lender and now own the property in full!

A mortgage prepayment allows you to make more than your regular mortgage payments you have agreed to pay in your contract. In other words, you are paying down your mortgage principal faster to reduce the amount of interest you pay on the loan. Depending on what kind of mortgage you have, it may include prepayment privileges, which allow you to make payments ahead of schedule without getting hit with a prepayment penalty.

A prepayment penalty is a fee that your mortgage lender may charge if you pay more than the allowable additional amount toward your mortgage or pay off your entire mortgage before the end of your term. You will need to refer to your mortgage commitment letter or speak to your mortgage advisor to find out what these prepayment penalties are.  

If you want to buy a home with a down payment of less than 20%, you’ll need mortgage default insurance, which is commonly referred to as CMHC insurance. This protects your lender in case you can’t make your mortgage payments. There are three mortgage insurance providers in Canada: Canada Mortgage and Housing Corporation (CMHC), Sagen and Canada Guaranty Mortgage Insurance Company.

Your lender pays an insurance premium on mortgage loan insurance. This premium is calculated as a percentage of the overall mortgage and is based on the size of your down payment. Mortgage loan insurance premiums range from 0.6% to 4.50% of the amount of your mortgage. The bigger your down payment, the less you need to pay in mortgage loan insurance premiums. You can pay the insurance premium as a lump sum, or choose to add it to your regular mortgage payments.

An insured mortgage is a mortgage that is covered by mandatory mortgage default insurance. If your down payment is between 5% and 19.99%, you will need to get an insured mortgage. If the borrower fails to make their mortgage payments, the lender is protected. Lenders tend to offer the lowest (or best) mortgage rates to these kinds of borrowers as they’ve paid their own insurance premiums and the lender effectively has minimal risk in lending money to this borrower.

If you have a down payment of at least 20%, you will qualify for an uninsured or conventional mortgage, which does not require mortgage default insurance.

In Canada, the minimum amount you need for your down payment is typically 5%. However, it also depends on the purchase price of your home.

Purchase price Minimum down payment required
$500,000 or less $500,000 or less
$500,000 to $999,999 5% of the first $500,000 of the purchase price

10% of any portion of the purchase price above $500,000
$1 million or more 20% of the purchase price

Some lenders may also require a larger down payment amount if you’re self-employed or have a poor credit history.

A second mortgage is an additional loan taken out on a property that is already mortgaged. Since they are in second position (hence their name), it means that if the homeowner defaulted on their payments and the property was taken into possession, the lender in first position would always be paid out first, whereas the lender in second position runs the risk of not being repaid. To compensate for this added risk, mortgage rates for second mortgages are always higher than for principal mortgages.

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