Canadian Mortgage Calculator

Built for Canada's legally required semi-annual compounding — not a US-style shortcut.

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Canadian law requires mortgage interest to be compounded semi-annually, even though payments are monthly — this calculator uses the correct converted monthly rate, not a US-style monthly-compounding shortcut.

Monthly payment
$2,441.57
Total interest
$332,469.78
Effective monthly rate
0.4532%

A US-style mortgage calculator using simple monthly compounding on the same nominal rate would show a slightly higher payment — the semi-annual compounding rule works modestly in the borrower's favor.

A worked example

A $400,000 mortgage at 5.5% over a 25-year amortization comes to about $2,441.57 a month under Canada's semi-annual compounding rule — versus roughly $2,456.35 if a US-style monthly-compounding calculator were used instead on the same nominal rate.

Frequently asked questions

Why does Canada use semi-annual compounding at all?

It's a long-standing requirement under the federal Interest Act, which mandates that mortgage interest be expressed as compounded no more than semi-annually unless stated otherwise — a consumer protection rule with roots going back over a century.

Does semi-annual compounding cost more or less than monthly compounding?

Slightly less, for the same nominal annual rate — converting a semi-annual rate to its equivalent monthly rate produces a number a touch below simply dividing the annual rate by 12, which is what a US-style calculator would do.

Is the difference large enough to matter?

It's a small effect per month, but it compounds (quite literally) over a 25-30 year amortization — using a US mortgage calculator for a Canadian mortgage will slightly overstate the true payment and total interest.

This calculator provides estimates for general informational purposes only and is not financial advice.