The real Canadian math — interest compounded semi-annually, not in advance — on total cost of borrowing rather than the number on the rate sheet.
Canadian fixed mortgages compound semi-annually, not monthly — so the math below is the real math, not the American approximation most online calculators run. Move a slider and the term redraws.
Payments use the Canadian convention for fixed-rate mortgages: interest compounded semi-annually, not in advance, converted to an effective monthly rate. Figures are illustrative and are not an offer of credit.
Cost of borrowing saved over a 5-year term.
A real file adds prepayment privilege value, penalty formula (IRD vs three months' interest), portability and insured status. IntelliRate prices all of them; this calculator prices the four biggest.
This is the difference between a rate quote and an answer. Two offers at an identical rate routinely diverge by five figures once these are priced.
Canadian fixed mortgages compound semi-annually, not in advance. The effective monthly rate is (1 + annual/2)^(1/6) − 1, and the difference against monthly compounding is real money over a five-year term.
A lower rate pays down principal faster on the same amortization. Two files with the same payment can arrive at renewal thousands of dollars apart in equity.
Alt-A and private programs are priced with fees measured in percent, not basis points. A 1% fee on a $640,000 mortgage is $6,400 the rate sheet never mentions.
Interest rate differential versus three months’ interest, and the posted rate a lender uses in the IRD calculation, decide what an early payout costs. On a bank posted-rate IRD it can run into five figures.
Lump sum allowance, payment increase allowance and whether the mortgage can move to the next property all carry a dollar value for a client who will use them.
These are three separate pricing markets with different default insurance premiums and different lender appetite. Putting them on one comparison line produces the wrong answer.
The live version prices penalty exposure, prepayment privileges and insured status too.