Mortgage Calculator – Calculate Your Monthly Mortgage Payment (USA & Canada)
Buying a home is one of the largest financial decisions most people will ever make. Whether you're purchasing your first home, upgrading to a larger property, refinancing an existing mortgage, or comparing different loan options, understanding your monthly mortgage payment is essential.
Our Mortgage Calculator helps homebuyers in both the United States and Canada estimate their monthly mortgage payments instantly. Simply enter your home's purchase price, down payment, interest rate, and loan term to calculate your monthly payment. You can also include property taxes, homeowners insurance, mortgage insurance (PMI or CMHC), HOA fees, and other housing costs to get a realistic estimate of your total monthly housing expense.
Unlike a basic mortgage payment calculator, our calculator provides a complete breakdown of your payment, including principal, interest, taxes, insurance, and optional costs, along with a detailed amortization schedule showing how your mortgage balance decreases over time.
What Is a Mortgage?
A mortgage is a loan provided by a bank, credit union, or mortgage lender to help finance the purchase of a home or other real estate property.
Instead of paying the entire purchase price upfront, the buyer makes a down payment and borrows the remaining amount. The property serves as collateral for the loan, meaning the lender can recover the property through foreclosure if the borrower fails to make payments.
Mortgage loans are typically repaid through fixed monthly installments over a period of:
- 10 years
- 15 years
- 20 years
- 25 years (common in Canada)
- 30 years (most common in the United States)
Each payment gradually reduces the loan balance while also paying interest to the lender.
How Does a Mortgage Payment Work?
A mortgage payment usually consists of four main components, commonly known as PITI:
Principal
Principal is the amount you originally borrowed.
Each monthly payment reduces your remaining loan balance. During the early years of your mortgage, only a small portion of your payment goes toward principal.
Interest
Interest is the cost of borrowing money.
Mortgage interest is calculated based on your remaining loan balance. Since your balance is highest at the beginning of the loan, most of your early payments go toward interest.
As your balance decreases, more of each payment is applied toward principal.
Property Taxes
Property taxes are charged by local governments.
Many lenders collect taxes monthly through an escrow account and pay the annual property tax bill on your behalf.
Tax rates vary significantly depending on where you live. Examples:
- United States: roughly 0.5%–2.5% of the home's value annually
- Canada: approximately 0.3%–2.0%, depending on the province and municipality
Homeowners Insurance
Mortgage lenders generally require homeowners insurance to protect the property against damage caused by:
- Fire
- Storms
- Theft
- Vandalism
- Natural disasters (depending on coverage)
Insurance premiums vary based on location, property value, and coverage.
Mortgage Insurance: Canada vs United States
One of the biggest differences between Canadian and U.S. mortgages is mandatory mortgage insurance.
Mortgage Insurance in Canada (CMHC, Sagen & Canada Guaranty)
In Canada, if your down payment is less than 20%, mortgage default insurance is legally required. This insurance protects the lender—not the borrower—in case of default.
There are three approved providers:
- CMHC (Canada Mortgage and Housing Corporation) – the federal Crown corporation and the best-known provider
- Sagen Mortgage Insurance (formerly Genworth Canada)
- Canada Guaranty
The insurance premium is based on your loan-to-value (LTV) ratio and is usually added to your mortgage rather than paid upfront.
Example
- Home price: $600,000
- Down payment: 10% ($60,000)
- Mortgage amount: $540,000
- CMHC insurance premium (approximately 3.1% at this LTV): $16,740
- Total mortgage financed: $556,740
Because the premium is financed, it increases your monthly payment. Our calculator can include this cost automatically when applicable.
Mortgage Insurance in the United States (PMI)
The U.S. has a similar concept called Private Mortgage Insurance (PMI).
PMI is generally required when your down payment is less than 20%.
Unlike Canadian mortgage insurance:
- PMI is provided by private insurance companies.
- It is usually paid monthly.
- It can often be cancelled once you reach approximately 20% equity in your home (subject to lender rules and federal regulations).
PMI typically costs between 0.2% and 2% of the original loan amount annually, depending on factors such as credit score, loan type, and down payment.
Down Payment and Loan-to-Value (LTV)
Your down payment is the amount you pay upfront toward your home's purchase price.
The remainder is financed through your mortgage.
The Loan-to-Value (LTV) ratio is calculated as:
Loan Amount ÷ Home Price × 100
Example:
- Home Price: $500,000
- Down Payment: $100,000
- Loan Amount: $400,000
- LTV: 80%
A lower LTV generally results in:
- Better interest rates
- Lower monthly payments
- Reduced lending risk
- No mortgage insurance once you meet country-specific thresholds (20% down in both Canada and the U.S.)
Fixed-Rate vs Adjustable-Rate Mortgages
Fixed-Rate Mortgage
A fixed-rate mortgage keeps the same interest rate throughout the loan term.
Advantages:
- Stable monthly payments
- Easier budgeting
- Protection from rising interest rates
This is the most common mortgage type in the United States.
Adjustable-Rate Mortgage (ARM)
An Adjustable-Rate Mortgage starts with a fixed interest rate for an introductory period (for example, 5 years) before adjusting periodically based on market conditions.
Advantages:
- Lower initial interest rates
- Lower early payments
Disadvantages:
- Payments can increase after the fixed period ends.
Variable-Rate Mortgages (Canada)
Canadian borrowers commonly choose variable-rate mortgages, where the interest rate fluctuates with the lender's prime rate.
Variable-rate mortgages may reduce borrowing costs when rates fall but can increase payments or extend the amortization period when rates rise.
How Mortgage Payments Are Calculated
Mortgage payments are calculated using the standard amortization formula:
M = P × [r(1 + r)^n] ÷ [(1 + r)^n − 1]
Where:
- M = Monthly payment
- P = Loan principal
- r = Monthly interest rate
- n = Total number of monthly payments
This formula ensures your mortgage is fully paid off at the end of the loan term.
Mortgage Amortization
An amortization schedule shows:
- Every monthly payment
- Principal paid
- Interest paid
- Remaining balance
During the first years of a mortgage, most of your payment goes toward interest.
Later in the loan, the majority goes toward reducing principal.
Our calculator provides a complete amortization schedule so you can see exactly how your mortgage is paid down over time.
Additional Homeownership Costs
Beyond your mortgage payment, you should budget for:
- Property taxes
- Homeowners insurance
- PMI (U.S.)
- CMHC/Sagen/Canada Guaranty insurance (Canada, if applicable)
- HOA or condo fees
- Utilities
- Maintenance and repairs (many homeowners budget about 1% of the home's value annually)
- Closing costs
- Legal fees
- Land transfer taxes (Canada)
- Title insurance (U.S.)
Including these expenses provides a more accurate picture of your total monthly housing cost.
How Much House Can You Afford?
Lenders evaluate several factors before approving a mortgage, including:
- Gross monthly income
- Credit score
- Debt-to-income (DTI) ratio
- Employment history
- Existing debts
- Down payment
- Cash reserves
A commonly used guideline in the U.S. is the 28/36 Rule:
- Spend no more than 28% of your gross monthly income on housing expenses (PITI).
- Spend no more than 36% on all monthly debt payments combined.
Canadian lenders also assess affordability using federally regulated mortgage stress tests for many borrowers, ensuring they can continue to afford payments if interest rates rise.
Tips to Lower Your Mortgage Costs
You can reduce the total cost of your mortgage by:
- Improving your credit score before applying.
- Comparing offers from multiple lenders.
- Shopping based on the APR, not just the advertised interest rate.
- Making a larger down payment.
- Choosing a shorter amortization period if your budget allows.
- Making additional principal payments to reduce interest over the life of the loan.
- Refinancing when market conditions are favorable.