Before you make an offer on a home in Toronto or anywhere in the GTA, you need a realistic idea of your monthly mortgage payment. A mortgage calculator does the math in seconds, but understanding the inputs helps you avoid surprises. This guide explains how payments work in Canada and the rules that affect how much you can borrow.

The five numbers that set your payment

1. Mortgage amount: the purchase price minus your down payment, plus mortgage default insurance if it applies.
2. Interest rate: fixed or variable. In Canada, fixed-rate mortgages are compounded semi-annually by law, which is slightly cheaper than monthly compounding.
3. Amortization: the total time to repay the loan, commonly 25 years.
4. Term: the length of your current contract, often 3 or 5 years, after which you renew.
5. Payment frequency: monthly, bi-weekly or accelerated bi-weekly. Accelerated payments add the equivalent of one extra monthly payment per year and shorten your amortization.

Example: a $500,000 mortgage

Figures assume the rate stays the same for the whole amortization, which rarely happens, so treat them as estimates. A longer amortization lowers the monthly payment but increases the total interest you pay.

Canadian rules that affect your mortgage

Minimum down payment

• 5% on the first $500,000 of the purchase price.
• 10% on the portion between $500,000 and $1.5 million.
• 20% on homes of $1.5 million or more.

Mortgage default insurance

If your down payment is less than 20%, your mortgage must be insured through CMHC or a private insurer. The premium is a percentage of the loan and is usually added to the mortgage.

The stress test

Federally regulated lenders must check that you can afford payments at a qualifying rate, the greater of 5.25% or your contract rate plus 2%. This protects borrowers if rates rise at renewal.

30-year amortizations

Insured mortgages can have a 30-year amortization for first-time buyers and for buyers of newly built homes. Other insured mortgages are limited to 25 years.

Do not forget closing costs

Budget roughly 1.5% to 4% of the purchase price for closing costs. In Toronto, buyers pay both the Ontario land transfer tax and the Municipal Land Transfer Tax, although first-time buyers can qualify for rebates. Add legal fees, a home inspection, title insurance and moving costs.

Use a calculator, then talk to a professional

Try a free tool such as the Canadian mortgage calculator or the Financial Consumer Agency of Canada’s calculator to compare scenarios. Then get pre-approved by a lender or a licensed mortgage broker to confirm the rate and amount you qualify for.

Follow GTA housing trends in our Real Estate section and read the Toronto Housing Market Outlook 2026.