FinCalc .ca

Methodology

How each calculator computes its answers, with the formulas and Canadian-specific assumptions.

Constants reflect the 2026 tax year.

Mortgage

Canadian fixed-rate mortgages compound semi-annually by law (Interest Act, s. 6). For a nominal annual rate r and n payments per year, the per-period rate is:

$$ i = (1 + r/2)^{2/n} - 1 $$

The level periodic payment is the standard amortization formula:

$$ \text{PMT} = P \cdot \frac{i}{1 - (1 + i)^{-N}} $$

where N = years * n.

Accelerated frequencies

  • Accelerated bi-weekly: (monthly payment) / 2, paid 26 times per year.
  • Accelerated weekly: (monthly payment) / 4, paid 52 times per year.

Both schedules pay roughly one extra monthly payment per year, which shortens the amortization significantly.

Prepayments

The site supports three prepayment levers:

  • Annual recurring lump sum applied at the end of each scheduled year.
  • Payment increase added to every scheduled payment.
  • One-time lump sum applied to your first payment period.

Lender contracts express prepayment limits as a percentage of original principal (e.g. 15% per year). Helper text in each input shows your entered amount as a percentage of original principal so you can sanity-check against your contract.

Loan Payoff

Loan payoff iterates monthly until the balance reaches zero (or 1200 months — a sanity cap). At each month:

  1. Interest accrues on the current balance at the periodic rate.
  2. The scheduled payment plus any extras is applied: interest first, principal next.
  3. If a one-time lump sum is configured for that month, it is applied after the regular payment.

If the regular payment is too small to cover the first month’s interest, the calculator surfaces an error rather than running indefinitely.

Compounding

Most Canadian consumer loans compound monthly, but some products use semi-annual compounding (similar to mortgages). The compounding selector toggles between these two conventions while keeping the nominal annual rate the same.

Savings

Future value with periodic contributions assumes contributions occur at the end of each period and that the periodic compounding rate matches the contribution frequency:

$$ i = r / m, \quad N = y \cdot m $$

$$ FV = P_0 (1+i)^N + C \cdot \frac{(1+i)^N - 1}{i} $$

The contribution-from-target calculator inverts this to solve for C, returning 0 if the initial balance alone reaches the target.

TFSA

Annual contributions exceeding the current CRA limit, or cumulative contributions exceeding your total room, trigger a warning. The current-year limit is published by the Canada Revenue Agency.

RRSP

Contributions are capped at the lower of:

  • 18% of prior-year earned income, and
  • the current RRSP dollar cap published by the Canada Revenue Agency.

The estimated tax refund is contribution × marginal tax rate. The after-tax future value is FV × (1 − withdrawal marginal rate).

Inflation

When the inflation toggle is on, future values are converted to today’s dollars by dividing by (1 + i_inflation)^years.

Sources