The Canadian semi-annual rule, explained
The federal Interest Act of Canada (R.S.C. 1985, c. I-15, s. 6) requires that mortgage interest be quoted on either a yearly or semi-annual basis. In practice, every Canadian fixed-rate mortgage is compounded semi-annually, not in advance. US fixed mortgages compound monthly. That single difference is why a 5% rate in Toronto produces a smaller monthly payment than a 5% rate in Buffalo on the same loan.
Haven applies the conversion automatically: r_period = (1 + nominal/2)^(2/n) − 1, where n is the number of payment periods per year. A 5.25% nominal rate becomes about 0.4324% per month — not the 0.4375% you would get from naïvely dividing by 12.
Accelerated bi-weekly is the cheat code
The Financial Consumer Agency of Canada (FCAC) defines accelerated bi-weekly as exactly half your monthly payment, paid 26 times a year. That works out to 13 monthly payments per year instead of 12 — one extra payment, every dollar of which goes to principal.
Plain bi-weekly (non-accelerated) is just monthly × 12 ÷ 26 paid 26 times — same total annual cash flow as monthly, no acceleration. The word that matters is "accelerated."
CMHC mortgage insurance and the 20% line
Federal rules require mortgage default insurance whenever you put less than 20% down. The premium scales with loan-to-value:
- 15–19.99% down (80–85% LTV): 2.80% of the loan.
- 10–14.99% down (85–90% LTV): 3.10%.
- 5–9.99% down (90–95% LTV): 4.00%.
- Less than 5% down: not eligible. The minimum down payment is 5% on the first $500,000 of price, 10% on the portion from $500k to $1.5M, and 20% on anything above $1.5M.
The premium is financed into your loan principal — you don't pay it at closing. PST may apply on the premium in ON, QC, SK, and MB, which IS paid in cash at closing.
Land transfer tax
Most provinces charge a land transfer tax at closing. Ontario uses marginal brackets up to 2.5% on the portion above $2M. Toronto adds its own municipal LTT — same brackets through $2M, then a 2.5–3.5% kicker on the portion above $3M. BC charges 1% on the first $200k, 2% through $2M, then 3–5% above. Alberta has no LTT. Quebec, Manitoba, and Atlantic provinces all have their own structures — Haven's v1 ships brackets for ON, BC, and AB; other provinces will follow.
First-time buyers qualify for a partial or full rebate in ON, BC, and PEI. The exact threshold depends on the province; the calculator applies the rebate when you check the first-time-buyer box.
The federal stress test
OSFI Guideline B-20 requires lenders to qualify you at the higher of your contract rate + 2% or the Bank of Canada qualifying rate (5.25% as of 2026). So even if your actual rate is 5.00%, the bank checks whether you could afford payments at 7.00%. To see your stress-test affordability, plug your contract rate + 2% into the calculator and confirm the payment still fits inside 39% of your gross household income (the gross debt service ratio cap).
Frequently asked questions
Why is my Canadian mortgage payment lower than what a US calculator gives me?
Canadian fixed mortgages are compounded semi-annually, not in advance — required by the federal Interest Act. US fixed mortgages compound monthly. On the same rate and balance, the semi-annual convention produces a slightly lower effective monthly rate, so the payment is lower.
Should I take accelerated bi-weekly payments?
Almost always yes, if you can afford the cash flow. Accelerated bi-weekly is exactly half your monthly payment, paid 26 times a year — equivalent to 13 monthly payments per year. The extra payment goes 100% to principal, shaving roughly 3 years off a 25-year amortization.
What is CMHC insurance and why does it inflate my loan?
If you put less than 20% down, federal rules require mortgage default insurance. The premium is 2.80–4.00% of the loan, added to the principal and amortized over the full term.
How does the federal mortgage stress test affect what I can afford?
OSFI requires lenders to qualify you at the higher of your contract rate + 2% or the Bank of Canada qualifying rate. To see your stress-test payment, plug your contract rate + 2% into the calculator above.
What about prepayment privileges?
Most Canadian fixed mortgages let you prepay 10–20% of the original principal per year without penalty. v1 of this calculator doesn't model lump-sum prepayments — coming in v2.