Canadian Mortgage Calculator 2026: Payments, Stress Test, and CMHC Math Explained

Down payment minimums in Canada

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For our $700,000 example: 5% × $500,000 + 10% × $200,000 = $25,000 + $20,000 = $45,000 minimum (6.4% effective).

Going below 20% triggers CMHC mortgage default insurance. The premium scales by how low your down payment goes.

CMHC mortgage default insurance premiums (2026)

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The math example for a 5% down payment on a $600,000 home:

• Down payment: $30,000
• Loan: $570,000
• CMHC premium: $570,000 × 4.00% = $22,800 added to loan
• Total financed: $592,800

That $22,800 isn't just a tax — it costs another ~$16,500 in interest over the life of the loan because it's amortized at the mortgage rate. Putting 20% down (where possible) is the single biggest one-shot saving on a Canadian mortgage.

How payment frequency changes total interest

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The trick: an "accelerated" frequency means you pay half the monthly amount, but you make 26 payments instead of 24. That extra two payments per year is effectively one full extra monthly payment per year, all going to principal. Over the life of the loan it compounds into years of payoff time and tens of thousands of dollars saved.

Always select "accelerated" — not "standard" — biweekly or weekly when given the option by your lender.

Special programs for newcomers and first-time buyers

Newcomer programs at the Big 5:

• RBC Newcomer Mortgage — accepts foreign credit reports, up to 5 years post-arrival, 5% minimum down. Letter of employment and 3-month bank statements accepted in lieu of Canadian credit history.
• Scotiabank StartRight Mortgage — similar terms, with a slightly tighter underwriting policy. PR holders preferred, work-permit holders accepted on case-by-case basis.
• TD New to Canada Mortgage — full newcomer documentation accepted. Higher minimum down (10%) for work-permit holders without PR.
• CIBC Newcomer Mortgage — comparable to TD; insists on Canadian bank account opened first.
• BMO NewStart Mortgage — accepts foreign credit through CIBIL (India), Schufa (Germany), Experian (US/UK).

30-year amortization for first-time buyers (effective December 15, 2024): the federal government extended maximum amortization from 25 to 30 years for first-time buyers AND for any buyer purchasing a new-build home. The 30-year amortization lowers the monthly payment by roughly 7% versus 25-year at the same rate. On a $570,000 mortgage at 4.79%, that's $3,251/mo monthly (25-year) vs $3,036/mo (30-year) — a $215/mo difference that lets you qualify for ~$50,000 more house.

FHSA + HBP combo: If you're a first-time buyer, you can contribute up to $8,000/year (max $40,000 lifetime) to a First Home Savings Account. Contributions are tax-deductible (like an RRSP) AND withdrawals for a home purchase are tax-free (like a TFSA). Plus you can borrow up to $60,000 from your RRSP under the Home Buyers' Plan (raised from $35,000 in April 2024). A couple can combine FHSA + HBP for up to $200,000 toward a down payment, all tax-advantaged.

How much house can you actually afford?

Worked example for a household earning $130,000/year:

• Monthly gross income: $10,833
• GDS limit at 39%: $4,225/month for housing (mortgage + tax + heat + condo fees)
• Assume property tax $400/mo, heat $80/mo, no condo: $4,225 - $400 - $80 = $3,745/mo available for mortgage payment
• At stress test rate (6.79%, 25-year): max loan ≈ $547,000
• Plus 10% down ($61,000): max purchase price ≈ $608,000

This is meaningfully less than what the gross income would suggest, because the stress test forces qualification at 6.79% instead of the actual 4.79% contract rate. If the contract rate dropped from 4.79% to 3.99% (likely in late 2026 if BoC keeps cutting), the same household qualifies for ~$650,000.

Fixed vs variable in 2026

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Historical performance (data through 2024): variable beats fixed roughly 70% of the time on a 5-year horizon — but the 2022-2024 rate-shock period was a brutal exception that hurt variable-rate borrowers. Going forward in 2026, the math leans variable IF you believe in further BoC cuts. A mortgage broker (free, paid by the lender) can model both scenarios for your specific case.

Frequently asked questions

Is the mortgage stress test still required in 2026?

Yes. OSFI confirmed in March 2024 that the stress test remains in place for all federally regulated lenders (Big 5 banks, most credit unions). Provincially regulated credit unions and mortgage investment corporations (MICs) are not subject to the stress test but their rates are typically 0.5-1.5% higher.

Can newcomers to Canada get a mortgage without Canadian credit history?

Yes. All major banks run newcomer mortgage programs that accept foreign credit reports from CIBIL (India), Schufa (Germany), Experian (UK/US), and others. Typical requirements: minimum 6 months in Canada, valid PR or qualifying work permit, employment in Canada, 5-10% down payment, 3-month Canadian bank statements.

How much CMHC insurance will I pay on a $600,000 home with 5% down?

$600,000 home × 5% down = $30,000 down. Loan = $570,000. CMHC premium at 4.00% = $22,800. Total financed = $592,800. The premium is amortized over the loan, adding about $130/month to payment over 25 years at 4.79%.

What is the First Home Savings Account (FHSA)?

A registered account introduced in 2023 for first-time home buyers. Contributions up to $8,000/year (max $40,000 lifetime) are tax-deductible like an RRSP, AND withdrawals for a home purchase are tax-free like a TFSA. Couples can combine for $80,000. More efficient than the Home Buyers' Plan for most newcomers because the tax savings stack.

What's the difference between a mortgage broker and a bank?

A mortgage broker shops multiple lenders simultaneously to find your best rate, typically scoring 0.1-0.5% lower than the bank's posted rate. The broker is paid commission by the lender, so the rate you get is identical to what the lender would quote directly. A bank only offers its own products. For most borrowers, a broker is the right call.

Can I break my mortgage early if rates drop?

Yes, but it costs. Fixed-rate mortgages have an Interest Rate Differential (IRD) penalty of 3-5% of the loan ($15K-$25K on a $500K mortgage). Variable-rate mortgages typically have a 3-month interest penalty (~$3K-$6K). Break-even math: only worth it if rates drop 1.5%+ AND you have at least 18 months left in the term.

How does the Canadian mortgage stress test differ from the US qualifying rate?

The US has no equivalent. American lenders qualify borrowers at the actual contract rate (or sometimes a slight buffer). Canada's stress test was introduced in 2018 specifically to cool an overheating housing market and protect borrowers from rate shocks at renewal — because Canadian mortgages renew every 1-5 years while US mortgages typically lock for 30.

Is mortgage interest tax-deductible in Canada?

No — unless the mortgage is on a property you rent out (in which case interest is deductible against rental income). For owner-occupied homes, mortgage interest is NOT tax-deductible in Canada. This is opposite to the US, where mortgage interest on a primary residence is deductible.

Sources

• Office of the Superintendent of Financial Institutions (OSFI): Guideline B-20 (Residential Mortgage Underwriting), March 2024 update
• Bank of Canada: Qualifying rate for insured mortgages (held at 5.25% since 2021)
• Canada Mortgage and Housing Corporation (CMHC): Premium tables 2026 — cmhc-schl.gc.ca
• Department of Finance Canada: First Home Savings Account (FHSA) program details — canada.ca/en/department-finance/programs/financial-sector-policy/first-home-savings-account.html
• Canada Revenue Agency: Home Buyers' Plan limits and rules (HBP withdrawal raised to $60,000, April 2024)
• Government of Canada: 30-year amortization rule change for first-time buyers and new builds (effective December 15, 2024)
• The Interest Act (R.S.C., 1985, c. I-15) — semi-annual compounding requirement for Canadian mortgages

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This article provides general information about Canadian mortgages and is NOT financial, mortgage, or legal advice. Mortgage rates and rules change frequently. For advice specific to your case, consult a licensed mortgage broker or financial advisor. For immigration questions, book a consultation with a Regulated Canadian Immigration Consultant (RCIC) at gofarglobal.com.