# Canadian Loan Calculator

How does the Canadian mortgage payment calculation differ from the U.S. payment calculation?

The formula used to calculate mortgage payments in Canada and the U.S. is generally the same, but there are some differences in the specific calculations used.

In both Canada and the U.S., mortgage payments are calculated based on the principal amount borrowed, the interest rate, and the length of the mortgage term. However, in Canada, mortgage payments are typically calculated based on semi-annual compounding, while in the U.S., mortgage payments are usually calculated based on monthly compounding.

More below

### Information

There are other key differences as well:

**Mortgage Terms:**In Canada, mortgages are typically offered with a maximum term of 25 years, while in the U.S., terms can be as long as 30 years or even longer in some cases. This means Canadian mortgage borrowers must pay off their mortgages faster than their U.S. counterparts.**Down Payment Requirements:**In Canada, home buyers are required to make a minimum down payment of 5% of the purchase price, while in the U.S., down payment requirements can vary based on the type of loan and the lender. Some U.S. mortgage loans require as little as 3% down payment, while others may require 20% or more.**Mortgage Market:**The overall mortgage market in Canada is more heavily regulated than in the U.S. The Canadian government has implemented several measures to ensure that the mortgage market remains stable and that borrowers are not taking on too much debt. These measures include stress testing to ensure that borrowers can afford their mortgage payments and limits on the amount of debt that borrowers can take on relative to their income. In the U.S., there is generally less government regulation of the mortgage market.

### Instructions for the Canadian loan calculator

Enter the four primary inputs:

**Loan Amount:**This is the total principal amount of the loan.**Number of Months:**This is the length of the loan in months. You should enter the number of months that the loan will be repaid over. For example, if you have a 20-year mortgage, which is 240 months, you would enter 240.**Annual Interest Rate:**This is the annual interest rate on the loan. You should enter the interest rate as a percentage, not a decimal. For example, if the annual interest rate is 4.5%, you would enter 4.5.**Payment Amount:**This is the amount of each payment that you will make on the loan.

Note: You may enter 3 of the 4 values (Loan Amount, Number of Months, Annual Interest Rate, Payment Amount) and leave one value set to 0, and the calculator will calculate the unknown value based on the entered values.

The below secondary input must also be set.

**Payment Method:**Select the payment method you will use to pay off the loan. If the first payment is due when the loan originates set this option to "Advance." Otherwise, we'll assume the first payment is due one month after the origination date (when the funds are available) and in that case, this must be set to "Arrears."

Canadian loan style assumes monthly payments and semiannual compounding.

This calculator will solve for any one of four possible unknowns: "Amount of Loan", "Total Scheduled Periods" (term), "Annual Interest Rate" or the "Periodic Payment".

Enter a '0' (zero) for one unknown value.

Normally you would set the "Payment Method" to "Arrears" for a loan. This means that the monies are lent on one day and the first payment isn't due until one period after the funds are received.

If the first payment is due on the day the funds are available, then set "Payment Method" to "Advance". This is typical for 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?