01 The home
02 The mortgage
Amortization
Years
Payment frequency
03 Cost of owning
$250 a month
Pay it off sooner
Extra payments and annual lump sums
Most mortgages let you prepay without penalty. Here is how many years that takes off.
Mortgage-free in
Move either slider to see how much sooner you are mortgage-free and what it saves you.
Insured or 20% down
Should you wait and save 20%?
Two buyers of a $1,000,000 home, each with $200,000 and the same monthly budget, at your rate of 4.50% over 25 years. One goes insured with 7.5% down and invests the other $125,000; the other puts 20% down. Insured mortgages usually get a rate 30 to 50 basis points lower; this uses 0.40%. Whoever has the lower payment invests the difference.
The five-year verdict
20% down is $23,634 ahead
The CMHC premium of $37,000 goes on the insured loan, so it owes more. The 0.40% lower rate saves $18,398 of interest over the five years, and the $125,000 kept out of the house keeps earning. Home equity assumes the price stays flat, so it shows only the mortgage paid down; any price growth adds the same to both. Investment growth is before tax, as in a TFSA.
The cost of waiting. Saving another $125,000 can take years. Every 1% that prices rise while you save adds $10,000 to the price of a $1,000,000 home.
Example: $1M home, 25-year amortization, five-year term, 5% a year investment return. The 0.40% insured discount is a typical market average. Sources: Ratehub.ca, CMHC.
How it works
How your mortgage payment is calculated in BC
Your payment depends on four numbers: the mortgage amount, the interest rate, the amortization and how often you pay. Canadian fixed-rate mortgages compound interest twice a year, so the quoted rate is converted to a monthly rate first. A $640,000 mortgage at 4.50% over 25 years is $3,542.23 a month.
The mortgage amount
The price, less your down payment, plus anything added to the loan: the CMHC premium when you put down less than 20%, and 5% GST on a newly built home unless a rebate applies.
| Down payment | Premium |
|---|---|
| 5% to 9.99% | 4.00% |
| 10% to 14.99% | 3.10% |
| 15% to 19.99% | 2.80% |
| 20% or more | None |
Charged on the mortgage amount and added to it, plus 0.20% for a 30-year amortization. Homes priced at $1.5M or more cannot be insured. Source: CMHC.
| Price | Minimum down |
|---|---|
| $500,000 | $25,000 (5%) |
| $800,000 | $55,000 (6.9%) |
| $1,000,000 | $75,000 (7.5%) |
| $1,400,000 | $115,000 (8.2%) |
| $1,500,000 and up | 20% |
5% of the first $500,000 plus 10% of the rest up to $1.5M. Source: Canada.ca.
The stress test
Lenders approve you at the greater of 5.25% or your contract rate plus 2%, then check two ratios against your gross income: housing costs (GDS) up to 39% and housing plus all other debt (TDS) up to 44%. That decides how much you can borrow, not what you pay.
The all-in monthly cost
The mortgage is only part of owning. Property tax, home insurance, utilities and any strata fee are added to give the monthly figure you actually budget for. Closing costs, including property transfer tax, are paid once, on completion.
Questions
Frequently asked
How is a mortgage payment calculated in Canada?
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Canadian fixed-rate mortgages compound interest twice a year, not monthly, so the quoted rate is converted to an equivalent monthly rate before the payment is worked out. On an $800,000 home with 20% down, a 4.50% rate and a 25-year amortization, the $640,000 mortgage costs $3,542.23 a month.
What is CMHC mortgage insurance?
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CMHC (Canada Mortgage and Housing Corporation) insurance protects the lender if a borrower defaults. It is required when the down payment is less than 20% of the price. The premium is a one-time charge added to the mortgage and paid off with it.
How is the CMHC premium calculated?
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It is a percentage of the mortgage amount, set by how much you put down: 4.00% with 5% to 9.99% down, 3.10% with 10% to 14.99%, and 2.80% with 15% to 19.99%. An $800,000 home with 10% down has a $720,000 mortgage, so the premium is $22,320 and the mortgage becomes $742,320. CMHC adds 0.20% to the rate for a 30-year amortization.
Is CMHC insurance available on any property?
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No. Homes priced at $1,500,000 or more cannot be insured, so they need at least 20% down. The longest insured amortization is 25 years, or 30 years for first-time buyers and for anyone buying a newly built home (since December 15, 2024).
What is the minimum down payment in Canada?
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5% of the first $500,000 of the price plus 10% of the portion from $500,000 up to $1,500,000. A $1,000,000 home needs $75,000 down (7.5%). At $1,500,000 and above the minimum is 20%.
What is the mortgage stress test?
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Lenders qualify you at a higher rate than the one you will pay: the greater of 5.25% or your contract rate plus 2%. At a 4.50% contract rate you must qualify at 6.50%. It limits how much you can borrow, not what you pay each month.
What are the GDS and TDS limits?
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GDS is housing costs (mortgage at the stress-test rate, property tax, heat and half the strata fee) as a share of gross income. TDS adds every other debt payment. CMHC caps them at 39% and 44%. Many lenders use the same limits on uninsured mortgages; some are stricter.
How much income do I need to buy a $1 million home in BC?
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With 20% down, a 4.50% contract rate (6.50% stress test), a 25-year amortization, $3,000 a year of property tax, $100 a month for heat and no other debt, the 39% GDS limit needs household income of $175,649. Other debts or a strata fee raise it.
Is an accelerated bi-weekly payment worth it?
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Accelerated bi-weekly means paying half the monthly payment every two weeks. That is 26 half payments, or 13 monthly payments a year instead of 12, and the extra one goes to principal. On a $640,000 mortgage at 4.50% over 25 years it pays the loan off in 21.7 years.
What does it cost each month to own a home besides the mortgage?
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Property tax, home insurance, utilities and, for a condo or townhouse, the strata fee. The all-in monthly figure in this calculator adds them to the mortgage. Separately, budget for closing costs such as BC property transfer tax and legal fees when you buy.
Is there a GST rebate for first-time buyers of a new home?
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Yes. The federal first-time home buyer GST rebate removes the full 5% GST on a newly built home up to $1,000,000, phasing down to nothing at $1,500,000, for purchase agreements signed on or after May 27, 2025. Confirm your eligibility with the CRA.
Why choose an insured mortgage over saving for 20%?
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Insured mortgages usually get a rate 30 to 50 basis points lower because the lender carries no default risk. That saving can offset much of the CMHC premium, and you buy years sooner instead of saving while prices move.
Does CMHC insurance protect me as the buyer?
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No. It protects the lender. You benefit indirectly through lower rates and the ability to buy with less than 20% down. If you default, you are still responsible for any shortfall after the home is sold.
Rates today
BoC policy rate
2.25%
Prime rate
4.45%
Next rate announcement
Dec 9, 2026
2026 decision dates. Rates and dates live from the Bank of Canada.
More calculators
Reviewed by Kyle Mark *PREC, REALTOR®, eXp Realty, Vancouver. Updated October 2026.
Estimates only, not mortgage advice. Payments assume a fixed rate compounded semi-annually, as Canadian fixed-rate mortgages are. Confirm every figure with your lender or mortgage broker.
Kyle Mark Personal Real Estate Corporation, eXp Realty