Why Canadian mortgages are different
By law, fixed-rate mortgages in Canada quote interest compounded semi-annually, so the true monthly rate is slightly lower than the posted rate divided by 12.
CMHC insurance
With less than 20% down you must buy mortgage default insurance: 4.00% of the loan for 5–9.99% down, 3.10% for 10–14.99% and 2.80% for 15–19.99%. It is added to the mortgage. Since December 2024, first-time buyers and buyers of new builds can choose a 30-year amortization on insured mortgages.
FAQ
How do I calculate a Canadian mortgage payment?
Convert the posted rate to an effective annual rate with semi-annual compounding, then to a monthly rate, and use the standard annuity formula.
What is an accelerated bi-weekly payment?
Half your monthly payment every two weeks — 26 payments a year, equal to one extra monthly payment.
How much is CMHC insurance?
2.8% to 4.0% of the loan depending on your down payment.