Canadian (fixed-rate) mortgages use semi-annual compounding: the posted rate is quoted as a nominal rate compounded every 6 months, then converted to a per-payment-period rate. Generic US-style calculators (rate / 12) give results that are slightly too high. This tool uses the correct Canadian conversion, plus a rate converter, a Canada vs US comparator, and the B-20 stress test.
The Canadian posted rate is a nominal rate compounded semi-annually. Converting to a per-period rate uses i = (1 + r/2)2/n − 1, where n = number of payments per year.
The same posted rate produces different payments: Canada converts from semi-annual compounding, the US divides straight per month (monthly compounding).
OSFI Guideline B-20 requires federally regulated lenders to test affordability at a qualifying rate = max(posted rate + 2%, 5.25%). OSFI confirmed the 5.25% benchmark still applies as of January 2026 (checked October 9, 2026).
Limits: this tool uses ideal amortization without per-payment lender rounding, without property taxes, without default insurance premiums (CMHC), and without other fees. Variable mortgages use monthly compounding — see FAQ.
Fixed-rate mortgages in Canada are quoted as a nominal rate compounded semi-annually (every 6 months), per the Canadian Interest Act. Before computing the payment, the posted rate must be converted to a per-period rate: i = (1 + r/2)^(2/payments_per_year) - 1. For monthly payments: i = (1 + r/2)^(1/6) - 1. At a 5.00% posted rate, the effective Canadian monthly rate is 0.41239%, slightly lower than the US method (5.00% / 12 = 0.41667%). Example: C$400,000 principal, 25 years — Canadian payment C$2,326.42/month vs the US method C$2,338.36/month, a difference of C$11.94/month or C$3,582.07 over 25 years.
Example: C$500,000 price, 20% down so C$400,000 principal, 5.00% posted rate, 25-year amortization, monthly payments. Effective monthly rate i = (1.025)^(1/6) - 1 = 0.0041239. Payment = 400,000 x 0.0041239 / (1 - 1.0041239^-300) = C$2,326.42/month. On the first payment, C$1,649.57 is interest and C$676.85 reduces principal.
Accelerated bi-weekly means paying half the monthly payment every two weeks — 26 times a year, equivalent to one extra monthly payment per year. Example: C$400,000 principal, 5.00% posted, 25 years — monthly payment C$2,326.42 so accelerated bi-weekly is C$1,163.21. The result is paid off in 559 payments (about 21.5 years) with total interest of C$249,577.30, saving C$48,348.69 versus regular monthly payments, whose total interest is C$297,925.98.
The B-20 stress test is an OSFI underwriting rule requiring federal lenders to test affordability at a qualifying rate = the greater of (posted rate + 2%) and the 5.25% benchmark. OSFI confirmed the 5.25% benchmark still applies as of January 2026 (checked October 9, 2026). Example: with a 4.29% posted rate the qualifying rate is 6.29%. For a C$400,000 principal over 25 years, the payment at the contract rate is C$2,167.43/month versus C$2,628.58/month at the qualifying rate.
The semi-annual conversion applies to fixed-rate mortgages. Variable/adjustable mortgages generally use monthly compounding (monthly rate = posted rate / 12), the same as the US convention. This calculator uses the semi-annual conversion; to simulate a variable rate, use the Canada vs US comparator mode and read the US column as an approximation.
Free tool by NRTechStudio
Explore similar finance tools and calculators. 100% free, accurate, and runs completely in your browser without sign-up.
2 taps, no typing needed — diagnostics are sent automatically.