Peggy’s Cove, St. Margarets Bay
Mortgage comparison calculator
Two mortgages side by side: the payment on each, the interest and balance at the end of each term, and which costs less over the period they share, on Canadian compounding.
How does a mortgage comparison calculator compare two offers?
It costs both over the shorter of the two terms: interest, plus upfront costs, less cashback. On $400,000 over 25 years, a variable rate starting at 4.45% costs $9,593 less than a fixed 4.95% over 5 years if it never moves, and more if it rises over 0.26 points a year. Both rates are illustrations.
Compare two mortgages side by side
Use it to compare mortgage rates from two lenders, a fixed rate against a variable one, or two terms. Enter each offer as it was quoted, with any fee or cashback. The arithmetic is the same anywhere in Canada; nothing in it is specific to Nova Scotia.
Fixed vs variable: what a rate change does
As a fixed vs variable mortgage calculator, the question it answers is how far the variable rate can rise before the fixed rate would have been cheaper. The table runs the starting example, $400,000 over 25 years, with the variable rate moving by a set amount on each anniversary.
| Variable rate, each year | Against the fixed | Interest, 5 years | Rate, year 5 | Payment, year 5 |
|---|---|---|---|---|
| Fixed at 4.95% (Mortgage A) | The baseline | $92,654 | 4.95% | $2,315.05 |
| Down 0.5 points a year | $27,920 less | $64,734 | 2.45% | $1,815.37 |
| Down 0.25 points a year | $18,777 less | $73,877 | 3.45% | $2,003.95 |
| No change | $9,593 less | $83,061 | 4.45% | $2,202.79 |
| Up 0.25 points a year | $374 less | $92,280 | 5.45% | $2,411.50 |
| Up 0.26 points a year: about the break-even | $4 less | $92,650 | 5.49% | $2,420.03 |
| Up 0.5 points a year | $8,874 more | $101,528 | 6.45% | $2,629.53 |
| Up 1 point a year | $27,436 more | $120,090 | 8.45% | $3,091.31 |
The break-even sits at 0.26 points a year: 5.49% by year 5. Below that the variable rate costs less over the term, above it more. Change either rate in the calculator and the break-even moves with it. For how each type behaves when the Bank of Canada moves, read fixed vs variable mortgage in Nova Scotia; for where rates sit today, Nova Scotia mortgage rates.
Go deeper
The detail, if you want it
Mortgage term comparison: 3-year vs 5-year
Two terms can only be compared over the years they share. After 3 years the shorter mortgage renews at a rate nobody can state today, so the calculator stops there and says so.
On $400,000 over 25 years, a 3-year fixed at 4.95% against a 5-year fixed at 4.45%: after 3 years the difference is $5,817 of interest, and the balances are $373,617 and $371,841. The 5-year mortgage then keeps its rate for 2 more years; the 3-year takes whatever the market offers. Both rates are illustrations.
| 3-year at 4.95% | 5-year at 4.45% | |
|---|---|---|
| Monthly payment | $2,315.05 | $2,202.79 |
| Interest over the first 3 years | $56,959 | $51,142 |
| Balance after 3 years | $373,617 | $371,841 |
| Balance at the end of its own term | $373,617 | $350,894 |
What each tends to suit, as a description and not advice. A 3-year fixed: a middle path: a fixed payment without committing for five years, and a smaller penalty window. A 5-year fixed: a payment you can budget around for the full term; the longest exposure to a fixed-rate penalty.
Comparing a renewal letter with another lender’s quote is the same sum on your current balance: the mortgage renewal calculator is set up for it.
25 vs 30-year amortization
A longer amortization lowers the payment and raises the interest. On $400,000 at 4.45%, 30 years is $2,005.24 a month against $2,202.79 over 25: $197.55 a month less.
| 25 years | 30 years | |
|---|---|---|
| Monthly payment | $2,202.79 | $2,005.24 |
| Interest over 5 years | $83,061 | $84,442 |
| Principal repaid over 5 years | $49,106 | $35,872 |
| Balance after 5 years | $350,894 | $364,128 |
Over the 5-year term the 30-year mortgage pays $1,381 more interest and leaves $13,234 more owing. With less than 20% down, an insured mortgage allows 30 years only for first-time home buyers buying any home, and anyone buying a newly built home, and the default insurance premium is 0.20 percentage points higher.
The mortgage amortization calculator shows the schedule behind either payment. The mortgage prepayment calculator shows what paying the difference anyway takes off the longer one.
What differs beyond the rate
The penalty for leaving early. A closed fixed-rate mortgage usually costs the greater of an amount equal to three months’ interest on what you still owe and the interest rate differential: the lender works out the interest left to pay on the remaining term at your rate, works it out again at a comparison rate, and charges the difference. FCAC’s example: $200,000 at 6% with 36 months left is $3,000 of three months’ interest and an IRD of $12,000. On a closed variable mortgage, every one of the six large banks charges three months’ interest, but not on the same rate. RBC, TD and BMO use your rate, Scotiabank your variable or cap rate, and CIBC its prime rate. The mortgage penalty calculator estimates both.
Portability. A portable mortgage can go with you to a new home, with its rate and the term left, so a move mid-term does not trigger the penalty. The lender approves you and the new property again, and the two closings have to fall inside its window. Not every mortgage is portable: ask before you sign. See porting in the glossary.
Prepayment privileges. How much you may pay down each year without a charge is set in the contract. Published allowances run from 10% to 20% of the original amount a year: TD 15%, BMO 20% (10% on its restricted product), National Bank 10%, First National 15% in Nova Scotia, CMLS and RMG 20%. BMO’s Smart Fixed and CMLS’s Rate Advantage allow full repayment in the first years only on a sale to an unrelated buyer at market value (or a refinance with the same lender); a lower rate can come with fewer ways out.
Fixed or adjustable payment on a variable rate. With an adjustable payment, the payment changes when the rate changes and a set amount of each payment still goes to principal. With a fixed payment on a variable rate, more of each payment goes to interest when rates rise; if rates reach the trigger point written in your contract, the lender may raise the payment. This calculator resets the payment.
None of these appear in a rate comparison, and any of them can outweigh a tenth of a point. What breaking your mortgage costs goes through the penalty in detail.
How the comparison is worked out
Each payment is the level amount that clears the mortgage over its amortization at the rate entered, with a fixed rate compounded semi-annually as the Interest Act requires. Interest, principal and the balance come from the payment-by-payment schedule, run on the payment rounded to the cent. The mortgage payment calculator uses the same arithmetic for one mortgage.
The cost of a mortgage over the period is the interest paid, plus its upfront cost, less its cashback. Principal is not a cost: every dollar of it comes off what you owe. That is why a lower payment is not the same thing as a cheaper mortgage.
A variable rate with a change entered steps once a year, on the anniversary. At each step the payment is reset so the mortgage still ends when it would have. Lenders differ on compounding: on the starting example, monthly compounding on Mortgage B makes the payment $2,211.99 instead of $2,202.79, and the interest over 5 years $83,855 instead of $83,061.
The break-even is found by trying rate changes until the variable mortgage’s cost over the period equals the fixed one’s. It is a property of the two offers you entered, not a view on where rates are going.
Why a broker
Licensed, independent, paid by the lender
- Licensed in Nova Scotia Associate broker 3001134, verifiable on the provincial register
- $0 broker fee On a standard residential mortgage the lender pays, not you
- Banks, credit unions, monolines One application, one credit check, placed with the lender that reads your file best
- Every part of the province Bedford office, remote process: Yarmouth to Sydney, the same four steps
Questions people ask
How do I compare two mortgage offers?
Put both on the same amount and compare what each costs over the shorter of the two terms: the interest paid, plus any upfront cost, less any cashback. Then look at the balance left. On $400,000 over 25 years, 4.95% fixed against 4.45% variable is $2,315.05 a month against $2,202.79, and $9,593 of interest apart over 5 years if the variable rate never moves. Both rates are illustrations.
Is a fixed or a variable mortgage cheaper?
It depends on what the variable rate does, and nobody knows that in advance. A fixed rate stays the same for the whole term and is usually higher than a variable rate for a similar term. On the starting example, the variable at 4.45% costs less than the fixed at 4.95% over 5 years unless its rate rises by more than 0.26 points a year, to 5.49% by year 5. That is a break-even between two illustrative rates, not a forecast.
Can I use this as a variable rate mortgage calculator?
Yes. Mark a mortgage variable and enter the change you want to test, in percentage points a year. On $400,000 at 4.45%, a rise of 0.25 points a year takes the rate to 5.45% and the monthly payment from $2,202.79 to $2,411.50 by year 5; interest over the term goes from $83,061 to $92,280. The rate steps once a year and the payment is reset each time.
How do I compare a 3-year and a 5-year mortgage term?
Over the first 3 years only. After that the 3-year mortgage renews at a rate nobody can state today, so a longer comparison would be a guess. On $400,000, a 3-year fixed at 4.95% against a 5-year fixed at 4.45% differs by $5,817 of interest over those 3 years. The 5-year then holds its rate for 2 more.
What does a 30-year amortization cost against 25 years?
A lower payment now, and more interest. On $400,000 at 4.45%, 30 years is $2,005.24 a month against $2,202.79. Over a 5-year term it pays $1,381 more interest and leaves $13,234 more owing. An insured mortgage allows 30 years only for first-time home buyers buying any home, and anyone buying a newly built home.
Does cashback make a higher rate worth taking?
Enter the cashback and the calculator takes it off that mortgage’s cost, so the two offers are compared net of it. The cash is not always yours to keep. If you took cash back, expect to repay part of it. BMO, TD and First National pro-rate it by the months left: on BMO’s published example, $5,000 with 15 of 60 months left means $1,250 back.
Still unsure? Ask me directly.
If your question isn't here, your situation is probably specific. Fifteen minutes on the phone beats reading another page, and nothing is pulled on your credit.
(902) 298-0218 · Monday to Friday, 8:00 am to 10:00 pm Atlantic
Two offers is a start. Thirty lenders is a comparison.
Send the two offers, or a renewal letter and a quote. You get back how they compare on rate, penalty terms and prepayment privileges, and what other lenders would offer on the same file, within a business day.
(902) 298-0218 · Monday to Friday, 8:00 am to 10:00 pm Atlantic