Checked 15 October 2026. What was checked. How these pages are maintained.
Monthly payment formula
Loan = price − down payment. Monthly rate r = annual rate ÷ 12. Number of payments n = years × 12. Payment = loan × r(1+r)n ÷ ((1+r)n − 1). This is principal and interest only. It does not include property tax, insurance, condo fees, CMHC insurance, or closing costs.
Worked example
A $500,000 price, $100,000 down, 5% amortized over 25 years is a $400,000 loan. Monthly principal and interest is about $2,326. Property tax, insurance, and condo fees are extra.
In Canada, under 20% down often means default insurance (see the CMHC page) which is usually added to the loan first. This page does not add that premium, so a high-ratio quote from a bank will be higher.
Principal and interest, and the bills that are not in the payment
A $320,000 loan at 4.5 percent, amortized over 25 years, is a monthly principal-and-interest payment of about $1,778.66. The rate in the formula is 0.045 ÷ 12. The number of payments is 300. Payment = loan × r × (1+r)n ÷ ((1+r)n − 1). Total paid over the 300 months is about $533,598, so the interest is about $213,598 on top of the $320,000 you borrowed. That interest figure is not a fee you can point to on one statement. It is the gap between every payment and the original loan.
Property tax, home insurance, heat, and a condo fee are not in $1,778.66. A lender’s “monthly housing cost” that includes those will be higher. This page also does not add mortgage default insurance. In Canada, a down payment under 20 percent usually means a premium that is added to the loan before the payment is calculated. Run the CMHC insurance calculator first, add that premium to the loan, then come back here. Skipping that step understates both the payment and the interest.
A shorter amortization is a different loan
The same $320,000 at 4.5 percent over 20 years is a higher monthly payment and less interest over the life of the loan. The page will show that as soon as you change the years. It will not show a penalty for breaking a fixed term early, a prepayment privilege, or the reset when a five-year term ends and 20 years of amortization remain. Those are in the mortgage contract. The payment here is the contract payment only if the rate, the amortization, and the loan amount match what you signed, with insurance already included in the loan if you financed it.
The balance the flyer skips
Principal and interest on the amount you type ignores insurance when the down payment is under 20 percent. Five percent down adds a premium the flyer leaves out shows that gap.
Common questions
Why is this different from my bank quote?
Banks add tax, insurance, and sometimes default insurance. Rate holds and compounding conventions also differ by country.
What down payment should I use in Canada?
Often 5–20%. Under 20% usually means mortgage default insurance. This page does not add that premium.