A calculator answers only the question it was programmed to answer
A calculator can produce a mathematically correct result from incomplete assumptions.
Before relying on an output, identify:
- Input source
- Interest convention
- Payment frequency
- Term and amortization
- Qualifying versus contract rate
- Fees included or excluded
- Taxes and insurance treatment
- Lender-specific policy
- Whether the result is eligibility, cash flow or total cost
Calculator reference table
| Calculator | Main question | Best use | Common misuse |
|---|---|---|---|
| Mortgage payment | What is the scheduled payment? | Budget and product comparison | Treating payment as approval |
| Amortization | How does principal decline? | Long-term cost and prepayment planning | Assuming rate stays constant for entire amortization |
| Stress test | Can income support the qualifying payment? | Institutional qualification estimate | Treating result as a lender commitment |
| LTV | How much secured debt exists relative to value? | Equity and lender-category screening | Using borrower estimate instead of accepted value |
| GDS/TDS | How do housing and total debts compare with gross income? | Residential qualification estimate | Ignoring lender-specific income/debt treatment |
| NOI | What property income remains before mortgage debt? | Rental/commercial analysis | Omitting vacancy, management or reserves |
| DSCR/DCR | How strongly does NOI cover debt service? | Commercial loan sizing | Using actual payment when lender uses qualifying debt service |
| Cap rate | What return does NOI imply relative to value? | Valuation and market comparison | Treating cap rate as investment return after financing and tax |
| Bridge interest | What does short-term timing cost? | Closing-gap planning | Ignoring fees, extensions and overlapping property costs |
| Penalty | What might early discharge cost? | Refinance/sale planning | Estimating IRD without lender’s exact formula |
| Refinance break-even | When do savings recover upfront costs? | Holding-period decision | Ignoring balance differences and secured-debt extension |
| Commercial loan sizing | What loan is supported by LTV and DCR? | Initial commercial screening | Ignoring covenants, environmental and sponsor risk |
| Construction draw | What advance may be available at this stage? | Draw planning | Treating invoices as completed value |
Mortgage payment calculator
Formula
For a fixed-rate mortgage quoted at nominal annual rate j, compounded semi-annually:
Effective monthly rate i = (1 + j ÷ 2)^(2 ÷ 12) − 1
Monthly payment = P × i × (1 + i)^n ÷ ((1 + i)^n − 1)
Where:
- P = principal
- i = effective monthly interest rate
- n = number of monthly payments in the amortization
What it answers
The contractual principal-and-interest payment under the stated assumptions.
What it does not answer
- Approval
- Property tax
- Heating
- Condo fees
- Insurance
- Closing costs
- Renewal rates
- Penalty
- Total cost under future terms
Amortization calculator
An amortization schedule separates every payment into:
Interest for period = Opening balance × periodic rate
Principal reduction = Payment − Interest
Closing balance = Opening balance − Principal reduction
Use it to compare:
- 25 versus 30 years
- Standard versus accelerated payments
- Lump-sum prepayments
- Balance at renewal
- Cumulative interest
A five-year fixed term does not fix the rate for a 25-year amortization. Long-term projections require renewal-rate assumptions.
Stress-test calculator
For most newly underwritten uninsured mortgages at federally regulated institutions, OSFI’s current minimum qualifying rate is the greater of:
- Contract rate plus 2%, or
- 5.25%
OSFI currently does not expect the MQR to apply to a qualifying uninsured straight switch with no increase in loan amount or amortization.[^OSFI-MQR]
A stress-test calculator uses the qualifying rate to calculate the mortgage payment included in GDS and TDS. It does not predict the actual payment unless the contract rate equals the qualifying rate.
LTV calculator
LTV = Total secured mortgage debt ÷ Lender-accepted property value × 100
For a purchase, the lender or insurer may use the lower of purchase price and appraised value, subject to program rules.
For a refinance, the accepted appraisal or valuation controls.
Include:
- First mortgage
- HELOC outstanding balance or authorized exposure where lender policy requires
- Second mortgage
- Private charges
- Other secured debt included by lender
GDS and TDS calculator
GDS = Qualifying housing costs ÷ Gross qualifying income × 100
TDS = (Qualifying housing costs + Other required debt payments) ÷ Gross qualifying income × 100
Housing costs commonly include:
- Qualifying mortgage payment
- Property taxes
- Heating
- Applicable condominium-fee portion
CMHC’s current standard self-employed product page states maximum GDS/TDS thresholds of 39%/44% for that product, but lenders and insurers can apply additional rules and different treatment.[^CMHC-SE]
Rental-income calculators
A rental calculator must first identify the method:
- Gross rental inclusion
- Rental offset
- Add-back
- Net rental income
- Full property cash-flow analysis
CMHC’s current income-property product permits up to 50% of gross rent or a net-rental approach for eligible 2–4 unit non-owner-occupied properties.[^CMHC-RENTAL]
Identical rent can produce different qualification results because the method controls which taxes, heat, condo fees and mortgage payments enter the ratio.
NOI calculator
Effective gross income = Potential rent + Other recurring income − Vacancy and collection loss
NOI = Effective gross income − Stabilized operating expenses
NOI generally excludes:
- Mortgage principal and interest
- Income tax
- Depreciation
- Owner-specific financing costs
The lender may include a management allowance and reserve even where the owner currently self-manages or has not incurred the expense.
DCR/DSCR calculator
DCR = Stabilized NOI ÷ Annual qualifying mortgage debt service
Interpretation:
- 1.00 = NOI equals debt service
- 1.20 = $1.20 of NOI per $1.00 of debt service
- Below 1.00 = property does not fully cover debt service from NOI
The required ratio and qualifying payment are lender-, property- and program-specific.
Cap-rate calculator
Cap rate = Stabilized NOI ÷ Property value × 100
Rearranged:
Indicated value = Stabilized NOI ÷ Market cap rate
Cap rate does not include mortgage leverage, income tax, appreciation or future capital expenditure.
Bridge-interest calculator
For simple-interest illustration:
Interest = Principal × Annual rate × Days ÷ 365
Add separately:
- Lender fee
- Brokerage fee where applicable
- Legal fee
- Appraisal
- Extension fee
- Discharge cost
- Overlapping property expenses
$300,000 × 9% × 45 ÷ 365 = $3,328.77 interest
If total fees are $6,500:
All-in short-term cost = $3,328.77 + $6,500 = $9,828.77
Penalty calculator
A closed mortgage penalty may be based on:
- Three months’ interest
- Interest-rate differential
- Greater of the two
- A different contractual formula
Use the lender’s current written estimate. Posted rates, discounts, remaining term and reinvestment rate can materially change IRD.
Refinance break-even calculator
Simple break-even months = Total upfront costs ÷ Monthly cash-flow savings
A stronger analysis also compares:
- Mortgage balance at the end of the holding period
- Total interest
- Fees
- Penalty
- Debts paid
- Behavioural risk of re-borrowing
Commercial loan-sizing calculator
LTV-supported loan = Accepted value × Maximum LTV
Maximum annual debt service = Stabilized NOI ÷ Required DCR
Convert the annual debt-service capacity into a principal amount using the lender’s qualifying rate and amortization.
Maximum indicative loan = Lower of LTV-supported loan and DCR-supported loan
Then apply:
- Minimum/maximum loan
- Tenant concentration
- Environmental risk
- Sponsor strength
- Property type
- Covenant requirements
Construction-draw calculator
A simplified lender-controlled draw may follow:
Eligible cumulative advance = Recognized completed value or eligible cost × Advance rate
Current draw = Eligible cumulative advance − Prior advances − Holdback − Required reserves
The exact basis may be:
- Cost to date
- Percentage complete
- As-completed value
- Lesser of cost and value tests
Invoices alone do not establish completed value.
Calculator interpretation protocol
- [ ] Is the rate a contract rate or qualifying rate?
- [ ] Is Canadian semi-annual compounding used where applicable?
- [ ] Are payments monthly, biweekly or accelerated?
- [ ] Is the property value accepted by a lender?
- [ ] Are all mortgages and HELOCs included?
- [ ] Is rental income treated under the correct program?
- [ ] Are fees and penalties included?
- [ ] Is the holding period realistic?
- [ ] Does the result measure approval, cash flow, value or total cost?
- [ ] Has the result been stress-tested?
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