Mortgage
Calculator Canada 2026

Canadian lenders use two debt-service ratios. Your Gross Debt Service (GDS) ratio should not exceed 39% of gross income, and your Total Debt Service (TDS) ratio should not exceed 44%. On a household income of $100,000, that means a maximum monthly housing cost of roughly $3,250. At 5.5% over 25 years, that supports a mortgage of approximately $475,000, depending on property taxes and heating costs.

As of early 2026, the average 5-year fixed mortgage rate in Canada is approximately 5.0% to 5.5%, while variable rates sit around 5.5% to 6.0%. The Big Five banks (RBC, TD, Scotiabank, BMO, CIBC) typically post higher rates, while mortgage brokers and online lenders often offer rates 0.25% to 0.75% lower. Always negotiate or shop through a broker.

Canada Mortgage and Housing Corporation (CMHC) mortgage insurance is required when your down payment is less than 20% of the purchase price. The premium ranges from 2.8% to 4.0% of the loan amount depending on the loan-to-value ratio. For example, on a $400,000 mortgage with 10% down, the CMHC premium is approximately 3.10%, adding $12,400 to your mortgage. This protects the lender, not the borrower.

All Canadian mortgage applicants must qualify at the higher of their contract rate plus 2% or the Bank of Canada qualifying rate (currently 5.25%). If you are offered a rate of 5.0%, you must prove you can afford payments at 7.0%. This stress test applies to insured, insurable, and uninsurable mortgages and reduces the maximum amount Canadians can borrow compared to the actual payment.

For insured mortgages (down payment less than 20%), the maximum amortization is 25 years. For uninsured mortgages (20% or more down), some lenders offer up to 30-year amortizations, though 25 years remains the most common. In the 2024 Fall Economic Statement, certain first-time buyers gained access to 30-year amortization on new builds. A shorter amortization saves significant interest but increases monthly payments.

A fixed-rate mortgage locks in your interest rate for the entire term (typically 5 years in Canada). A variable-rate mortgage fluctuates with the Bank of Canada prime rate. Historically, variable rates have cost less over time, but they carry the risk of rising payments. In a rising rate environment, variable-rate borrowers may see significant payment increases. Most Canadian mortgages are 5-year terms, not 30-year like in the US.

Canadian mortgages typically have 5-year terms that must be renewed (US mortgages are usually 30-year fixed). Canada requires a stress test. CMHC insurance replaces PMI. Canadian mortgage interest is not tax-deductible (unlike in the US). Minimum down payment is 5% for homes up to $500,000, 10% for the portion above $500,000, and 20% for homes over $1 million.

The minimum down payment in Canada depends on the purchase price. For homes up to $500,000, you need at least 5% down. For the portion between $500,000 and $1,499,999, you need 10%. For homes at $1,500,000 or above, you need 20%. For example, a $700,000 home requires $25,000 (5% of first $500K) plus $20,000 (10% of remaining $200K) totalling $45,000.

The 5-year fixed term is the most popular in Canada, chosen by roughly 60-70% of borrowers. Shorter terms (1, 2, or 3 years) may offer lower rates when the yield curve is inverted or falling. A shorter term makes sense if you expect rates to drop before renewal. However, 5-year terms offer the most payment certainty and often come with the most competitive rates from brokers.

When your mortgage term expires (typically after 5 years), you must renew or switch lenders. Your lender will send a renewal offer, but you are not obligated to accept it. Shop around, as switching lenders can save thousands. At renewal, you do not need to re-qualify under the stress test if you stay with the same lender (though switching lenders requires re-qualification). Always negotiate your renewal rate.