Canada Calculator Methodology
Last updated 25 July 2026
Every Canadian calculator on Fiscalgrove is built from the same underlying amortising-loan formula used elsewhere on the site, adapted for Canada's legally distinct compounding convention, plus the specific statutory or lending-convention data relevant to that calculator. This page summarises the formulas and sources; each calculator's own page also explains its formula and worked example in context.
The semi-annual compounding rule
Canada's Interest Act (R.S.C. 1985, c. I-15, s. 6) requires that interest on a fixed-rate mortgage be calculated as if compounded semi-annually, not in advance — even though payments are made monthly. We convert the quoted nominal annual rate to a true effective monthly rate:c = (1 + i/2)^(2/12) − 1, where i is the nominal annual rate as a fraction. This effective rate is slightly lower than a naive annual-rate-divided-by-12 calculation. Variable-rate mortgages are not subject to this statutory convention in practice — lenders compound them monthly, so we usec = i / 12 instead. Once the correct effective monthly rate is derived for either rate type, the payment itself uses the standard amortising-loan formula:M = P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is the loan amount, r is the effective monthly rate, and n is the number of monthly payments (amortization years × 12). All calculations run on full, unrounded figures — we only round to the nearest cent for display, so amortization schedules don't drift from cumulative rounding.
GDS/TDS affordability and the mortgage stress test
Our Affordability calculator implements the two lender debt-service ratios used by federally regulated Canadian lenders: GDS (Gross Debt Service — housing costs including principal & interest, property tax, heat, and 50% of condo fees, capped at 39% of gross income) and TDS (Total Debt Service — GDS costs plus all other debt payments, capped at 44% of gross income). PerOSFI Guideline B-20, both ratios are calculated using a stress-tested "qualifying rate" — the greater of the contract rate plus 2 percentage points, or a 5.25% floor — applied to every insured and uninsured mortgage since 2016.
CMHC mortgage default insurance
Our CMHC Insurance calculator uses the published federal minimum down payment formula (5% of the first $500,000 of price, plus 10% of the portion from $500,000 to $1,500,000), the standard tiered premium-rate table by loan-to-value, the 0.2 percentage point surcharge for amortizations beyond 25 years, and the $1,500,000 insured-financing eligibility ceiling, all as published byCMHC.
Land transfer tax bands
Our Land Transfer Tax calculator applies marginal (slice) tax bands for Ontario (provincial), the City of Toronto's Municipal Land Transfer Tax (which stacks on top of the Ontario provincial tax), British Columbia's Property Transfer Tax (including its residential surcharge above $3,000,000), and Quebec's province-wide minimum "welcome tax" rates, together with each jurisdiction's first-time-buyer rebate or exemption rules where they exist. Quebec municipalities (notably Montreal) may set higher top-bracket rates than the province-wide minimums used here.
Editable defaults
Every default value used in a calculation (qualifying-rate buffer, vacancy allowance, prepayment privilege percentage, comparison horizon, and so on) is visible and editable in the calculator itself — nothing is a hidden assumption. Where a figure is genuinely statutory or tiered by regulation (like land transfer tax bands or CMHC premium tiers), it reflects the published rule as closely as possible.