How Much Will a $300,000 Mortgage Cost in Canada?
Thinking of taking out a $300,000 mortgage in Canada? Whether you’re buying your first home, refinancing, or investing in a rental property, it’s important to understand the real cost of borrowing. From monthly payments to long-term interest, we’ll walk you through what to expect and how to make smart choices along the way.
What Will Monthly Mortgage Payments Look Like?
Your monthly mortgage payments depend on three main things:
- Your interest rate (fixed or variable)
- The amortization period (25 or 30 years)
- Your payment frequency (monthly, biweekly, weekly)
Let’s break down some real examples using a $300,000 mortgage.
Example 1: 25-year amortization, 5-year fixed rate at 4.89%
- Monthly payment: $1,726.08
- Biweekly: $796.21
- Weekly: $398.10
Example 2: 30-year amortization, 5-year fixed rate at 4.89%
- Monthly payment: $1,581.42
- Biweekly: $729.54
- Weekly: $364.77
📊 Monthly Payments: 25‑Year vs 30‑Year Amortizations
Compare typical monthly payments for a $500,000 mortgage over 25 and 30 years at different interest rates in today’s market.
| Interest Rate | 📆 25‑Year Amortization | 💼 30‑Year Amortization |
|---|---|---|
| 4.00% | $2,639 | $2,387 |
| 4.50% | $2,774 | $2,526 |
| 5.00% | $2,920 | $2,669 |
| 5.50% | $3,078 | $2,820 |
📌 Tip: A longer amortization reduces monthly payments but means paying more interest over the life of the loan. It’s a trade-off between affordability today and cost tomorrow.
How Much Interest Will You Pay Over Time?
Let’s say your $300,000 mortgage is set at a 4.89% interest rate.
- Over 25 years, you’d pay around $217,823 in interest.
- Over 30 years, that jumps to $269,312.
So while a longer amortization reduces your monthly payment, it increases how much you’ll pay overall.
💰 Total Interest Paid Over Time: 25 vs 30 Years
Here’s how much more you pay in total interest when extending your mortgage from 25 to 30 years at common interest rates. Based on a $500,000 loan with monthly payments.
| Interest Rate | 🔒 25-Year Term | 📆 30-Year Term | 📈 Extra Interest (30Y – 25Y) |
|---|---|---|---|
| 4.00% | $291,758 | $359,363 | +$67,605 |
| 4.50% | $332,168 | $409,612 | +$77,444 |
| 5.00% | $374,742 | $461,515 | +$86,773 |
| 5.50% | $419,414 | $515,012 | +$95,598 |
🔍 Insight: Even a 0.5% interest difference adds tens of thousands to your total repayment. Extending to 30 years makes homeownership more affordable monthly—but much more expensive long-term.
Fixed vs Variable Rates: Which One Costs More?
Fixed-rate mortgages offer stability — your payments stay the same over your mortgage term, making budgeting easier.
Variable-rate mortgages are riskier — your rate may go up or down based on changes to the Bank of Canada’s policy rate.
With a $300,000 mortgage:
- If rates drop, a variable rate could save you thousands.
- But if rates rise, your payments — or the interest you pay — could spike.
If you’re risk-averse or on a tight budget, a fixed rate might be safer. But if you can tolerate some fluctuation, a variable rate could pay off.
What About Mortgage Insurance?
If your down payment is less than 20%, you’ll need mortgage default insurance (CMHC insurance). This protects your lender in case you default.
- For a $300,000 mortgage with 5% down, insurance premiums could add $9,000–$12,000 to your loan.
- This increases both your monthly payments and the total interest paid.
🏠 CMHC Insurance Premiums by Down Payment
In Canada, if your down payment is less than 20%, mortgage default insurance is required. Here’s how premiums differ based on your down payment level on a $500,000 home (loan amount of $475,000).
| Down Payment | Loan-to-Value (LTV) | CMHC Premium Rate | Premium Amount | Total Mortgage with Premium |
|---|---|---|---|---|
| 5% ($25,000) | 95% | 4.00% | $19,000 | $494,000 |
| 10% ($50,000) | 90% | 3.10% | $14,725 | $489,725 |
| 15% ($75,000) | 85% | 2.80% | $13,300 | $488,300 |
📌 Tip: The more you put down, the less you’ll pay in insurance. Hitting at least 10% down can save thousands in CMHC fees alone.
How Much Income Do You Need for a $300,000 Mortgage?
Using current stress test rules (qualifying at 6.89%), you’ll need roughly $76,000–$80,000 in household income with minimal other debt.
Lenders will also look at:
- Your credit score
- Your debt-to-income ratio
- The size of your down payment
You can Use online calculators to estimate your affordability.
Don’t Forget the Hidden Costs
Besides your monthly mortgage payment, you’ll also need to budget for:
- Property taxes
- Home insurance
- Utilities
- Closing costs (1.5% to 4% of home price)
- Maintenance and repairs
So for a $300,000 mortgage, closing costs alone could be $4,500–$12,000 depending on where you live.
🔍 Hidden Costs of Homeownership: What to Budget For
Buying a home isn’t just about your down payment and mortgage. Here’s a checklist of common—but often overlooked—costs every Canadian homeowner should prepare for.
- ✅ Property Taxes – Paid annually or monthly through your lender
- ✅ Home Insurance – Mandatory if you have a mortgage, covers fire, theft, etc.
- ✅ Mortgage Insurance (CMHC) – If you put down less than 20%
- ✅ Closing Costs – Land transfer tax, legal fees, appraisal, title insurance
- ✅ Maintenance & Repairs – Annual upkeep, HVAC service, roof issues, etc.
- ✅ Utilities – Electricity, gas, water, internet, and garbage collection
- ✅ Condo Fees (if applicable) – Monthly payments for shared building maintenance
- ✅ Furnishing & Appliances – New furniture, fridge, washer/dryer, etc.
- ✅ Moving Expenses – Trucks, movers, boxes, and packing materials
- ✅ Renovations or Upgrades – Optional but often needed for personalization
💡 Tip: Set aside 1–3% of your home’s value each year for ongoing maintenance and unexpected repairs.
Final Thoughts: Plan Smart, Borrow Better
A $300,000 mortgage isn’t just about affording monthly payments — it’s about understanding the long-term impact on your finances.
Compare interest rates, choose a payment schedule that fits your budget, and consider speaking to a mortgage advisor for tailored help.
📊 Curious What Your Mortgage Will Really Cost?
A $300,000 mortgage is just the starting point. Your actual monthly payments depend on your rate, term, and amortization. Use our calculator or speak to a mortgage expert for a personalized breakdown.
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Clara Desai
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