How this calculator works
This calculator starts from the purchase price rather than a mortgage amount. It deducts the down payment to get the amount borrowed, then calculates the principal and interest payment over the amortization. Property tax and home insurance are divided by twelve and added, so the monthly figure reflects the whole housing payment rather than the loan alone. Total cost adds the down payment, every payment, and the tax and insurance paid over the same period. Mortgage default insurance, closing costs, legal fees, land transfer tax and condo fees are not included.
Formula
Amount borrowed = home price - down payment. Down payment share = down payment / home price. Loan to value = amount borrowed / home price. i = annual rate / 12; n = amortization years × 12. Payment A = P × i / (1 - (1 + i)^(-n)). Monthly total = A + (annual tax + annual insurance) / 12. Total interest = n × A - P.
Worked example
A $500,000 home with a $100,000 down payment borrows $400,000, a loan-to-value of 80% and a down payment share of 20%. At 5.25% over 25 years the principal and interest payment is $2,396.99. Adding $400.00 of tax and $150.00 of insurance per month gives a monthly cost of $2,946.99. Interest over the term is $319,097.26 and the home costs $984,097.26 in total once tax and insurance for 25 years are included.
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Frequently asked questions
Does the down payment affect the interest rate?
It can. A larger down payment lowers the loan-to-value, which may reduce the rate and removes mortgage default insurance for high-ratio loans in Canada. This calculator does not adjust the rate for you.
What costs are missing?
Closing costs, land transfer tax, legal fees, an appraisal, moving costs and, for a high-ratio loan, default insurance premiums. Add any financed premium to the amount borrowed before calculating.
Why is total cost more than twice the price?
It includes the down payment, every mortgage payment and the tax and insurance paid over the term. Interest over 25 years is a large share of a typical payment.
What happens after the amortization ends?
The loan is repaid. A mortgage term is usually shorter than the amortization, so the rate is renewed one or more times before then, which this fixed-rate estimate does not model.