What is Canadian semi-annual compounding?

Canadian mortgages are legally required to compound interest semi-annually (twice per year), not monthly as in the US. To convert a stated nominal rate to a monthly equivalent: effective monthly rate = (1 + nominalRate/2)^(1/6) − 1. This calculator applies this automatically when 'Canadian semi-annual' compounding is selected.

How is effective APR calculated?

For Canadian semi-annual mortgages, the effective annual rate = (1 + nominalRate/200)^2 − 1. This converts the semi-annual compounding to an annual equivalent. For monthly compounding (personal/auto loans), APR equals the nominal rate if no fees are included; fees increase the effective APR.

Why does total cost matter more than monthly payment?

A lower monthly payment can mask a much higher total cost due to a longer term or hidden fees. For example, a 0.5% rate difference on a $400,000 mortgage over 25 years is worth over $25,000 in total interest. This tool shows both so you can make the right trade-off.

What rates should I use?

Enter the rates from actual lender quotes — not posted rates. Fixed-rate quotes from your bank, a mortgage broker, or comparison sites (Ratehub, LowestRates.ca) are the most accurate. The placeholder rates shown are market context only; your actual quoted rate may differ significantly.

Does this include CMHC insurance?

No. CMHC mortgage default insurance (required when down payment is below 20%) adds 0.6%–4.0% of the loan amount to your principal and affects the total cost significantly. Use the Mortgage Stress Test calculator for full CMHC context.

Loan Comparison Calculator

Finance· 37 tools

Free multi-lender loan comparison tool for Canadian borrowers. Enter up to four lenders with their rates, setup fees, and prepayment penalties. Supports Canadian semi-annual compounding (standard for mortgages) and monthly compounding (personal and auto loans). Instantly compare monthly payment, total interest, total cost, and effective APR side by side, with the cheapest option highlighted and dollar savings calculated. Works for mortgages, personal loans, auto loans, and HELOCs.

Loan amount (CAD)

Term (years)

Compounding

Lender 1

Name

Rate (%)

Setup fee ($)

Penalty ($)

Lender 2

Name

Rate (%)

Setup fee ($)

Penalty ($)

Lender 3

Name

Rate (%)

Setup fee ($)

Penalty ($)

Lender 4

Name

Rate (%)

Setup fee ($)

Penalty ($)

Lender	Rate	Monthly	Total interest	Total cost	Eff. APR
Lender Acheapest	5.50%	$2,441.57	$332,470	$732,470	5.576%
Lender B	5.99%	$2,556.85	$367,055	$767,555 +$35,085	6.080%
Lender C	6.25%	$2,618.97	$385,690	$785,690 +$53,220	6.348%

Cheapest option — Lender A

Monthly payment$2,441.57

Total interest$332,470

Total cost$732,470

Effective APR5.576%

Updated for 2026 · CRA-confirmed · Compounding: Canadian semi-annual (mortgage standard)

Estimates only · verify rates with your lender before signing. Fees and CMHC insurance not included in this comparison.

Disclaimer: For informational purposes only. This is not financial, tax, or legal advice — consult a licensed professional before making decisions.

Frequently Asked Questions

References

Related Tools

Frequently Asked Questions

References and sources

Related Tools