Question 1

Why is this different from an American mortgage calculator?

Accepted Answer

Canadian fixed-rate mortgages are compounded semi-annually by law, while US mortgages compound monthly. On a $700,000 mortgage the difference is real money — an American calculator will overstate your Canadian payment by roughly $20 to $40 a month.

Question 2

Is accelerated bi-weekly actually worth it?

Accepted Answer

Yes, but not for the reason most people think. It works because you make 26 half-payments instead of 24, so you pay one extra monthly payment a year without noticing. Switch the frequency above and the calculator shows exactly what that saves you.

Question 3

What is the mortgage default insurance premium?

Accepted Answer

If you put down less than 20%, your lender requires insurance that protects them if you default. You pay for it. The premium is usually added to the mortgage rather than paid up front, so you pay interest on it for the life of the loan.