Canadian Loan Calculator
Introduction to the Canadian Loan Calculator
Canadian Mortgage Calculator
- Monthly payments with semiannual compounding.
- Create a printable payment schedule.
How does the Canadian mortgage payment calculation differ from the U.S. payment calculation?
The formula used to calculate mortgage payments in Canada and in the U.S. is generally the same. However, there are important differences in how the calculations are applied.
In both countries, mortgage payments are based on the principal amount borrowed, the interest rate, and the length of the mortgage term. However, in Canada, mortgage payments are typically calculated using semi-annual compounding, while in the U.S., mortgage payments are usually calculated using monthly compounding.
More below…
The Calculator-Calculate a Canadian Mortgage and Create a Payment Schedule
Information
There are other key differences as well:
- Mortgage Terms: In Canada, mortgages are typically offered with a maximum term of 25 years. In the U.S., terms can extend to 30 years or longer in some cases. This forces Canadian borrowers to repay their mortgages faster than most U.S. borrowers.
- Down Payment Requirements: In Canada, home buyers must make a minimum down payment of 5% of the purchase price. In the U.S., minimum down payments vary by loan program and lender. Some loans allow down payments as low as 3%, while others may require 20% or more.
- Mortgage Market: The mortgage market in Canada is more heavily regulated than in the U.S. The Canadian government has implemented policies designed to maintain stability and prevent excessive household debt. These include stress testing to ensure borrowers can afford payments and limits on debt relative to income. In the U.S., government regulation of the mortgage market is generally less restrictive.
Instructions for the Canadian loan calculator
Enter the four primary inputs:
- Loan Amount: The total principal amount of the loan.
- Number of Months: The full length of the loan in months. For example, a 20-year mortgage equals 240 months, so you would enter 240.
- Annual Interest Rate: The yearly interest rate, entered as a percentage (for example, enter 4.5 for 4.5%).
- Payment Amount: The amount of each scheduled payment on the loan.
Note: Enter values for any three of the four fields (Loan Amount, Number of Months, Annual Interest Rate, Payment Amount). Leave the remaining field set to 0, and the calculator will compute the unknown value.
The following secondary input must also be set:
- Payment Method: Select how payments are applied. If the first payment is due on the date the loan originates, select “Advance.” If the first payment is due one month after the loan funds are available, select “Arrears.”
Canadian Loan Calculator Help
The Canadian loan style assumes monthly payments and semi-annual compounding.
This calculator will solve for any one of four possible unknowns: “Amount of Loan,” “Total Scheduled Periods” (term), “Annual Interest Rate,” or “Periodic Payment.”
Enter a 0 (zero) for the unknown value.
For most loans, set the “Payment Method” to “Arrears.” This means the funds are disbursed on one day, and the first payment is due one period after the funds are received.
If the first payment is due on the same day the funds are available, set the “Payment Method” to “Advance.” This is common with leases.
Bruno says:
This calculator sucks I can not calculate the payments
Karl says:
You’re right. I made some changes this morning trying to get a few calculators to load faster, but in my haste, I left out a step and I broke 5 calculators on the site.
If you still need to do the calculation, they are all fixed now.
NOTE: You may have to perform a hard refresh of the page if it doesn’t work right away:
Depending on your operating system all you need to do is the following key combination:
Above, from Refresh Your Cache.
Igho says:
The Canadian calculator is great, except you have it in GBP (Great British Pounds). Canada uses the dollar.
Because of that, I got a little nervous about the accuracy of the calculator, so I ran it in Excel just to be sure.
Karl says:
Thank you. Two things. The user can set the currency. In the lower right-hand corner of every calculator, you’ll see a currency symbol and date option. Click on that to open the window where you select the currency.
Secondly, the math does not change with respect to the currency. So even when the currency is set to something other than your local currency, the numbers will be correct.
Igho says:
Okay, so I just went through the website again and you’re absolutely right. You can change the currency. My apologies for missing that.
Also, I took the time to go through the mortgage calculator again as well as the retirement calculator. They are both PHENOMENAL!!! I’ve already used the mortgage calculator to produce a schedule for a deal I was trying to put together this weekend. What you’ve done here is absolutely great.
This website just became my Go-to for financial calculations.
Much appreciated.
Karl says:
Glad to hear! Thank you for letting me know.
I’m curious though about something. Do you have any idea why you saw the British Pound symbol at first? The website makes an attempt to load your country’s currency symbol and if all else fails, the site defaults to ‘$’. You should have never even been bothered with having to change currency.
Igho says:
Not a clue why?
I’m in Canada. I do use a VPN on my computer but it always connects to the USA. So, there should be no reason why it would default to GBP?