Last updated October 13, 2026 · Report an error
Canadian mortgages are compounded semi-annually by law, regardless of how often you make payments — a genuine difference from the monthly-compounding convention used for US mortgages, not just a different label.
This calculator finds your monthly payment using the correct semi-annual compounding convention.
How it works
Enter the loan amount, annual interest rate, and amortization period. The calculator first converts the semi-annual compounding rate into an equivalent effective monthly rate, then applies the standard loan payment formula using that rate.
- Enter loan amount ($).
- Enter annual interest rate (%).
- Enter amortization period (years).
- Click Calculate to see your results.
Examples
$400,000 loan, 5.5%, 25-year amortization
A $400,000 Canadian mortgage at a nominal 5.5% rate over a 25-year amortization has a monthly payment of about $2,441.57 — slightly lower than a naive monthly-compounding calculation would suggest.
Who should use it
- Estimating monthly payments for a Canadian mortgage.
- Understanding why Canadian and US mortgage calculators can give slightly different results for the same nominal rate.
Industry applications
- Canadian mortgage lending and brokering
- Real estate and home buying education
Advantages
- Uses the legally correct semi-annual compounding convention specific to Canadian mortgages.
- Shows the full effective monthly rate conversion in the step-by-step solution.
Limitations
- Assumes a fixed rate for the full amortization period, not accounting for renewal at a new rate at the end of each term.
Common mistakes to avoid
- Using a US mortgage calculator (which compounds monthly) for a Canadian mortgage, producing a slightly inaccurate payment.
- Confusing the amortization period with the shorter mortgage term.
Best practices
- Use your lender's exact quoted nominal rate — Canadian lenders already account for the semi-annual compounding rule when quoting rates.
Tips
- Remember that your mortgage term (often 5 years) is shorter than your amortization period — you'll likely renew at a new rate partway through paying off the loan.