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Mortgage is a loan that helps individuals purchase properties in Ontario, Canada. Mortgages in Ontario are offered by a variety of financial institutions such as banks, credit unions, and mortgage companies. To be eligible for a mortgage in Ontario, an individual must be of legal age, have a steady income, a good credit score and have a sufficient down payment. The types of mortgages available in Ontario include fixed-rate mortgages and variable-rate mortgages. The term of a mortgage in Ontario is usually 25 years, although 30-year terms are also available. The Government of Ontario and the Canada Mortgage and Housing Corporation (CMHC) also offer various programs for first-time home buyers to help them with the purchase of their first home.

The main types of mortgages available in Ontario are fixed-rate mortgages and variable-rate mortgages. Fixed-rate mortgages have an interest rate that stays the same for the term of the loan, while variable-rate mortgages have an interest rate that can change.

The minimum down payment required for a mortgage in Ontario is 5% of the purchase price. However, it is recommended to have a higher down payment to lower the overall cost of the loan and to avoid mortgage insurance.

One of the Bank of Canada’s mandates is to control inflation. In order to do this, it uses the target for the overnight rate to influence lending and borrowing behaviour. When the BoC increases the target for the overnight rate, this makes it more expensive to borrow money; consequently, people tend to spend less. When people spend less and save more, demand in the market goes down, which then decreases the rate of inflation. 

When the Bank of Canada increases its target for the overnight rate, banks and other mortgage lenders also increase their prime lending rates. Since variable mortgage rates and home equity lines of credit (HELOCs) are directly tied to a lender’s prime rate, when the BoC hikes its policy interest rate, variable mortgage rates and HELOC rates then also go up. 

On the flip side, fixed mortgage rates are not tied to the prime rate. Instead, they are directly influenced by 5-year bond yields. As bond yields go up, the cost to lend money also increases. As a result, lenders raise their fixed mortgage rates. As of March 2022, bond yields have, for the most part, steadily increased in response to the BoC’s outlook and escalating inflation. Hence, fixed mortgage rates have also been climbing up. However, bond yields experienced a slight dip at the end of 2022, resulting in discounts for some fixed-rate mortgage products. 

Mortgage pre-approval is when a lender evaluates your financial situation and credit history to determine how much you can borrow. Mortgage pre-qualification, on the other hand, is when a lender gives you an estimate of how much you can borrow based on the information you provide. Both pre-approval and pre-qualification are used to help home buyers understand their borrowing potential and budget accordingly.

Yes, the Government of Ontario offers a land transfer tax refund for first-time homebuyers and the Canada Mortgage and Housing Corporation (CMHC) offers a Home Buyer’s Plan that allows first-time homebuyers to withdraw up to $35,000 from their RRSP for a down payment.

Why use a mortgage payment calculator?

It’s simple to concentrate on the final purchase price or the size of your mortgage when making home-buying plans. The most important figure for you, however, will be your regular repayment. After all, the amount you’ll need to deduct each month from your paycheck is for your mortgage payments.

What is a mortgage payment?

The amount you must pay each month toward your mortgage loan in order to reduce it and eventually pay it off is known as your mortgage payment. The principal (the amount borrowed in full) and interest on the loan are both covered by your monthly mortgage payment. Along with property taxes and other costs, it may also include mortgage default insurance, also referred to as CMHC insurance and necessary when the down payment is less than 20% of the cost of the home. More of your payments initially go toward paying interest, but eventually more of your payments will go toward reducing the balance of your mortgage.

What factors may have an impact on your mortgage payments?

The size of your mortgage payments can vary depending on a number of important variables. A few of these are:

    • Your home’s cost: This will determine how much money you need to borrow.
    • Putting down a deposit Your required mortgage payment will be lower the more cash you have available to put toward the purchase of your home. Your monthly mortgage payment will be lower as a result.
    • Total amount owed on your mortgage: The cost of your new home, less the down payment and any mortgage insurance that may be necessary, is included here. than those who stayed with a fixed rate, those who took out longer mortgage terms have paid less in interest. A fixed rate, however, might suit you better if you want stability over the course of your mortgage.
    • Your interest rate: Your monthly mortgage payments will be less if your interest rate is lower. To keep your monthly payment as low as possible, can assist you in locating the best mortgage rates currently available. In general, variable mortgage rates offer lower mortgage payments because they typically have lower interest rates when compared to fixed mortgage rates. In the past, over 90% of Canadians who have kept a variable mortgage rate for the duration of their mortgage term have paid less in interest than those who have stayed with a fixed rate, according to a seminal 2001 study. A fixed rate, on the other hand, might be more appropriate for you if you want stability over the course of your mortgage.
    • The amount of time it takes to pay off your entire mortgage is known as your amortization period. Your monthly mortgage payments will be lower the longer your amortization period is. But you will end up paying more in interest because it will take you longer to pay off your mortgage.

How do I get approved for a mortgage?

It’s crucial to take into account the requirements you’ll have to meet in order to be granted a mortgage when thinking about your monthly mortgage payments. The following are some of the most crucial items that potential lenders will look for:

    • A high credit score is required to be eligible for the lowest monthly mortgage payments and the best mortgage rates, which start at 680. You must have a credit score of at least 560 in order to be eligible for any type of mortgage. Learn more about the impact of your credit score on your ability to obtain a mortgage.
    • You must present evidence of your income, such as pay stubs or tax documents like your Notice of Assessment (NOA). Even with proof of income, many lenders will want to see that you have held the position for at least a year if you have recently started a new job.
    • Ability to pass a mortgage stress test: You must be able to pass a mortgage stress test, which verifies that you can continue to afford your mortgage payments at either your contract rate plus 2%, which is the higher of the two rates, or the “qualifying rate,” set by the Office of the Superintendent of Financial Institutions (OSFI). Even with the lowest mortgage rates available, you will be stress tested at your contract rate plus 2% after the Bank of Canada’s historically significant rate hike on July 13, 2022, as this will always be higher than 5.25%. (until rates come down again).
  • Down payment: The amount you put down determines the type of home you can afford, the size of your mortgage, and the amount of your monthly payments. Additionally, it influences whether you must buy mortgage default insurance, which is necessary if your down payment is less than 20% of the price of the house you’re buying. Your required minimum down payment will vary depending on the type of home you want to purchase:

Purchase Price

Minimum Down Payment

Less than $500,000


$500,000 – $999,999

5% of the first $500,000 and 10% of any amount over the first $500,000

$1,000,000 or more


How to calculate mortgage payments

Prior to using our mortgage payment calculator, calculating mortgage payments was difficult. The mortgage payment calculator on provides all the tools you need to run various scenarios and determine which mortgage is best for you. Continue reading to learn more about the calculator’s operation.

How to use the mortgage payment calculator

Start by entering the purchase price in the calculator. Next, choose a mortgage rate and amortization period. You have the option to enter a different rate in addition to the best rates displayed by the calculator for your province. The calculator will now display the amount of your upcoming mortgage payments.

Depending on the amount of your down payment, the mortgage payment calculator will by default display four different monthly payments. It will calculate the price of mortgage default insurance automatically. To see how your regular payment will be impacted, you can alter the down payment amount and the frequency of your payments.
Our calculator also estimates how much money you’ll need for closing costs and the amount of the land transfer tax. Additionally, you can use the calculator to calculate your monthly expenses in total, determine your payments in the event that mortgage rates increase, and display the evolution of your outstanding balance.
Before you start looking for a new home, it’s a good idea to use the calculator to figure out what you can afford. Use the “Renewal or Refinance” tab to calculate mortgage payments without taking a down payment into account if you are renewing or refinancing and know the total amount of the mortgage.

the best ways to cut your mortgage payments

You can reduce your monthly mortgage payments in a few different ways. A lower mortgage rate, a larger down payment, an extended amortization schedule, or a reduction in the purchase price are all options. Use the calculator to determine your payment under various conditions.

Remember that your maximum amortization period is 25 years if your down payment is less than 20%. It’s always a good idea to ask a mortgage broker for help if you’re having trouble locating a lower mortgage rate.

How can your mortgage be paid off more quickly?

Saving thousands of dollars in interest is possible if you can pay off your mortgage more quickly. All of the strategies needed to speed up mortgage repayment will, however, require you to make larger monthly payments over a shorter period of time. Understanding the fine print is crucial because some lenders may tack pre-payment penalties onto your mortgage. However, there are some methods you can use to pay off your mortgage more quickly, such as:

    • Increase the frequency of your mortgage payments to quicken the repayment process. For instance, if you were paying monthly, you might want to think about paying bi-weekly instead.
    • Your mortgage payment amount should be increased: The length of time it takes to pay off your mortgage will be shortened by any increase in the monthly payment amount you make.
    • Put a lump sum payment toward your mortgage if you can afford to do so after receiving a lump sum, such as a tax refund, inheritance, bonus, etc.



Faisal Susiwala is a highly skilled realtor in waterloo, Ontario who has built a strong reputation as a reputable, creative and dependable professional. He has achieved a deep understanding of the real estate market over the last 35+ years, and has earned the title of the #1 Individual RE/MAX Agent Worldwide*, and operates under the world’s #1 Real Estate Brand.

faisal’s trusted mortgage specialists

Don Travers

Bob Mcmaster

Brayden Hooper
Mortgage Agent

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