Methodology & sources
How we calculate
Every estimate on this site uses the same standards Canadian lenders and insurers use. Here is exactly how each calculator works, what we assume, and the official rules behind it. These are planning estimates — not approvals.
Last reviewed against current CMHC, OSFI, and CRA rules.
Payment math (semi-annual compounding)
Canadian fixed-rate mortgages compound semi-annually, not monthly. We convert your annual rate to a monthly effective rate with the standard formula:
monthly_rate = (1 + annual_rate / 2) ^ (1/6) − 1This is why a Canadian 5% mortgage is not the same monthly cost as an American 5% mortgage. We use this rate for payment, remaining balance, and affordability inversions.
CMHC default insurance
When your down payment is under 20% (a high-ratio mortgage), default insurance is required and added to your mortgage principal. We apply the standard premium tiers by loan-to-value (LTV):
- 80.01%–85% LTV: 2.80%
- 85.01%–90% LTV: 3.10%
- 90.01%–95% LTV: 4.00%
- 30-year insured amortization: +0.20% surcharge
Minimum down payment follows federal rules: 5% on the first $500,000, 10% on the portion to $1.5M, and 20% at $1.5M and above (not insurable). In Alberta there is no PST on the premium.
30-year insured amortization (Dec 2024)
Since December 15, 2024, first-time buyers and buyers of newly built homes can use a 30-year amortization on an insured (under-20%-down) mortgage. Our payment and affordability tools unlock 30 years when you check "first-time buyer" or "new build," and apply the +0.20% CMHC surcharge.
The stress test (qualifying rate)
Lenders qualify you at the higher of your contract rate + 2% or the 5.25% floor:
qualifying_rate = max(contract_rate + 2%, 5.25%)Affordability is solved so your costs stay within GDS ≤ 39% and TDS ≤ 44% at that qualifying rate, while your displayed payment uses your actual contract rate.
Affordability (GDS / TDS)
Gross Debt Service (GDS) includes mortgage payment, property tax, heating, and 50% of condo fees. Total Debt Service (TDS) adds your other monthly debts. We binary-search the maximum purchase price that keeps both ratios within standard limits at the stress-test rate, with the CMHC premium included in the financed amount.
First-time buyer GST rebate (new builds)
For qualifying first-time buyers of new builds, the federal GST rebate covers 100% of the 5% GST up to a $1,000,000 price (max $50,000), then phases out linearly to $0 at $1,500,000. Eligibility (agreement dates, owner-occupancy) is determined by the CRA — our tool estimates the rebate amount only.
What these estimates are not
These are planning estimates, not mortgage approvals or financial advice. Actual rates, premiums, and qualification depend on lender approval, insurer rules, and your full application. We connect you with licensed Alberta professionals when you are ready for real numbers.
Official sources
This site is for education and planning only. Calculator results are estimates only and are not mortgage approvals, financial advice, or lender commitments. Always get professional advice before making financial decisions. Rates, payments, cashback, eligibility, qualification, and lender options are subject to lender approval, insurer rules, borrower qualification, property details, and applicable terms and conditions. Alberta Mortgage Calculator accepts no liability for decisions made from calculator estimates or general site content.