Calculator assumes a constant nominal rate compounded semi-annually; actual mortgage contract terms govern.
A mortgage payment pays interest and reduces principal. The required amount depends on the loan balance, interest convention, payment schedule and amortization. A quoted rate alone is not enough to determine the payment.
Separate the inputs
Principal is the amount borrowed, not automatically the home's purchase price. Amortization describes the planned repayment period; the mortgage term describes how long the current agreement applies. A monthly estimate does not include every cost of owning a home.
Sources: FCAC — Choosing a mortgage
Example: a stated rate convention
Assume $400,000 principal, a constant 5% nominal annual rate compounded semi-annually, 25 years of amortization and monthly payments. Converting that convention to a monthly rate gives (1 + 0.05 ÷ 2)^(1 ÷ 6) − 1. Applying the annuity formula over 300 months gives approximately $2,326.42 per month.
This is a payment illustration, not a lender offer. It excludes insurance, fees, property taxes and future rate changes. A contract with a different interest convention can produce a different amount.
Regular and accelerated schedules differ
In this calculator, regular biweekly payments divide the annualized monthly payment by 26. Accelerated biweekly uses half the monthly payment 26 times a year, equivalent to thirteen monthly payments. With the example above, the accelerated amount is about $1,163.21 every two weeks; it is not simply a cheaper monthly bill.
Sources: FCAC — Choosing a mortgage
Compare the whole commitment
Check cash-flow timing alongside total interest and principal repayment. Prepayment rights and penalties depend on the agreement. Do not assume an accelerated schedule or extra lump sum is available without reviewing the contract.
- Confirm principal, rate convention and payment frequency.
- Budget for ownership costs outside the loan payment.
- Revisit the estimate when the term renews.
Sources: FCAC — Choosing a mortgage