Canada Mortgage Calculator 2026

A mortgage is a loan used to purchase real estate. The most common type is a fixed-rate mortgage where the interest rate remains constant throughout the loan term. Monthly payments are calculated using an amortization formula that ensures equal payments over the life of the loan.

Each payment consists of two parts: principal (reducing the loan balance) and interest (the cost of borrowing). In the early years, a larger portion goes toward interest. Over time, more of each payment goes toward principal.

The formula used is: M = P × [r(1+r)^n] / [(1+r)^n - 1], where M is the monthly payment, P is the principal, r is the monthly interest rate, and n is the total number of payments.