Down Payment

The minimum down payment depends on the purchase price of the home:

• 5% on the first $500,000
• 10% on the portion between $500,000 and $999,999
• 20% minimum for homes $1 million or more
  
  

If your down payment is less than 20%, you are required to purchase mortgage default insurance (often called CMHC insurance), which protects the lender and is added to your mortgage amount.

A larger down payment lowers your mortgage balance, reduces your monthly payments, and can help you qualify for better interest rates.

Amortization Period

Mortgages are typically calculated using an amortization period rather than a “loan term.”

Common amortization options:

• 25 years (most common)
• 30 years (usually requires 20% down)

Your amortization affects how much you pay monthly and how much interest you pay over time. A longer amortization lowers monthly payments but increases total interest.

Mortgage Term

Your term is how long your interest rate and mortgage contract are in place before renewal.

Common terms in Canada:

• 5-year fixed (most popular)
• 3-year fixed
• 5-year variable
• Other options from 1 to 10 years

At the end of your term, you renew your mortgage at current rates.

Mortgage Type

The two most common mortgage types in Canada are:

Fixed-Rate Mortgage
Your interest rate stays the same for the entire term. Your payment is predictable and stable, making budgeting easier.

Variable-Rate Mortgage
Your interest rate can change based on the lender’s prime rate. Payments may stay the same while the portion going toward interest vs. principal changes, or your payment may fluctuate depending on your lender’s structure. Variable rates often start lower but can rise over time.

Interest Rate

This calculator uses an estimated current mortgage rate. Your actual rate will depend on factors like:

• Credit history
• Income and debt levels
• Down payment amount
• Type of mortgage (fixed or variable)
• Mortgage term length

Property Taxes (BC)

Property taxes in British Columbia are based on your home’s assessed value and local municipal tax rates. These are paid annually but are often included in monthly budgeting for homeowners.

Be sure to factor in potential eligibility for the BC Home Owner Grant, which can reduce your property taxes on a principal residence.

Home Insurance

Mortgage lenders in Canada require home insurance. This protects your home against risks like fire and water damage. Insurance costs vary based on the property, location, and coverage.

Strata Fees (If Applicable)

If you are buying a condo or townhouse, you will likely pay strata fees. These monthly fees cover building maintenance, insurance for common areas, landscaping, and shared amenities. Strata fees are separate from your mortgage payment but should be included in your monthly housing budget.