Mortgage Calculator FAQs
Ontario mortgage payments, down payment, CMHC, land transfer tax, amortization and Rent vs Own — answered.
How is a mortgage payment calculated in Canada?
A Canadian mortgage payment is based on the loan amount (price minus down payment, plus any CMHC insurance), the interest rate, and the amortization period. Canadian fixed-rate mortgages compound interest semi-annually (not monthly), so the effective rate is converted before the payment is worked out. This calculator uses the exact semi-annual compounding formula, so your monthly, bi-weekly or weekly payment matches what a lender or Ratehub would quote.
How much down payment do I need in Ontario?
The federal minimum is 5% on the first $500,000 and 10% on the portion from $500,000 to $1.5 million. Homes priced $1.5M or more require at least 20% down. Putting down less than 20% means your mortgage must be insured (CMHC), which adds a premium to your loan. Use the down-payment calculator above to compare 5%, 10%, 15% and 20% side by side.
What is CMHC mortgage default insurance and how much is it?
When your down payment is under 20%, your lender requires mortgage default insurance — usually CMHC, Sagen or Canada Guaranty. The premium ranges from about 2.8% to 4.0% of the mortgage (plus a 0.20% surcharge for 30-year amortizations) and is added to your mortgage balance. In Ontario, 8% PST is charged on the premium and must be paid in cash at closing. The calculator computes all of this automatically.
How much is land transfer tax in Ontario and Toronto?
Ontario charges a provincial Land Transfer Tax on a sliding scale (0.5% to 2.5%). Buyers in the City of Toronto also pay a municipal LTT of roughly the same amount, effectively doubling it. First-time buyers can claim up to $4,000 off the Ontario tax and up to $4,475 off the Toronto tax. This calculator shows your land transfer tax (with the first-time buyer rebate) inside the "Cash needed to close" total.
What is an amortization schedule?
An amortization schedule shows, year by year, how each mortgage payment splits between interest and principal, and how your balance shrinks over time. Early payments are mostly interest; over the years more goes to principal (your equity). This calculator generates a full year-by-year schedule you can expand to individual payments, and includes it in the downloadable PDF.
Is it better to rent or own? (Rent vs Own)
Rent is 100% an expense — it builds your landlord's equity. When you own, part of every mortgage payment is interest (the cost of borrowing) and part is principal, which reduces your balance and builds your equity like forced savings. Our Rent vs Own comparison shows how much equity you could build over 5 or 10 years versus paying rent, before any possible home appreciation (appreciation is not guaranteed).
Can I use this calculator for refinancing?
Yes. Enter your remaining mortgage as the "purchase price", set the down payment to 0% (or your current equity), and adjust the rate and amortization to compare your current payment against a new rate. The side-by-side scenarios make it easy to see how a different rate or term changes your payment when refinancing or renewing.
How much mortgage can I afford in Ontario?
Lenders use two ratios: GDS (Gross Debt Service, max ~39%) and TDS (Total Debt Service, max ~44%), and you must qualify at the mortgage stress-test rate. As a rough guide, a household earning $150,000/year with low debt and 20% down can often qualify for roughly $700,000–$850,000. Use the Affordability tab above for an estimate, then get pre-approved for a firm number.
Is this mortgage calculator free and accurate?
Yes — it is completely free, with no sign-up. It uses legitimate Canadian and Ontario rules (semi-annual compounding, current CMHC premium tiers, Ontario + Toronto land transfer tax and first-time buyer rebates) so the numbers line up with Ratehub-style results. It is an estimate for planning only — confirm final figures with your lender, mortgage broker and lawyer.
Can you connect me with a mortgage broker to get pre-approved?
Yes. Tej Thakor and Usha Parmar of Royal LePage Terra Realty can refer you to trusted mortgage brokers and lenders in the Greater Toronto Area who can help you get pre-approved before you start house hunting. We provide referrals only — the broker or lender handles your application and approval. Call 647-684-1731 to get started.