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Estimate monthly rental cash flow and returns using Canadian mortgage compounding.
After the entered running costs and mortgage payment, this property has -$157.45 in average monthly cash flow before income tax.
Monthly cash flow
-$157.45Monthly mortgage payment
$1,742.45Principal and interest, including any financed premium.Example: illustrative 25-year amortization at the policy rate.
Rates as of
Begin with the price and the cash down payment. Their difference is the base loan. If your lender quotes a CMHC mortgage insurance premium, enter its dollar amount; this calculation adds it to the loan. The mortgage payment combines principal and interest and uses the full amortization period. Amortization means the repayment schedule, not the shorter contract term after which your mortgage may need renewal.
The rate initially shown is the Bank of Canada's checked 2.25% overnight policy target. It is only an editable benchmark, not the rate offered to rental-property borrowers. Use the nominal annual rate on your mortgage quote. The model converts that rate using semi-annual compounding, then estimates equal monthly payments. It holds the rate constant for the calculation and does not predict renewal rates, fees, prepayments or variable-rate changes.
Monthly rent is multiplied by twelve, then reduced by the vacancy percentage. Management fees apply to the rent remaining after vacancy. Property tax and insurance are annual totals, while condo fees are monthly and multiplied by twelve. The balance before debt service is net operating income. Deducting twelve monthly mortgage payments gives annual cash flow; dividing by twelve gives an average month. This smooths vacancy across the year rather than forecasting a specific empty month.
Cap rate is annual operating income divided by price. Cash-on-cash return is annual cash flow divided by the down payment, expressed as a percentage.
Consider a $500,000 property with $100,000 down, no CMHC premium, 25-year amortization and the illustrative 2.25% rate. Monthly rent is $2,500; vacancy is 5% and management is 8% of collected rent. Annual property tax is $3,600, monthly condo fees are $200 and annual insurance is $1,200. Collected annual rent is $28,500. Management costs $2,280, leaving operating income of $19,020 after the other entered costs.
The negative cash flow means the entered costs and loan payments exceed collected rent. If this property instead qualified for a $11,600 financed premium, the loan would become $411,600 and the payment $1,792.98. That second case uses CMHC's 2.90% table rate on the $400,000 base loan.
The CMHC Income Property product covers qualifying non-owner-occupied buildings with two to four units. Its published limits include 80% loan-to-value, a price below $1 million and up to 25 years of amortization. The calculator checks those numerical conditions when a premium is entered. It cannot check the unit count, borrower eligibility, property suitability or lender underwriting because those details are outside this form.
| Base loan-to-value up to | Premium on base loan |
|---|---|
| 65% | 1.45% |
| 75% | 2.00% |
| 80% | 2.90% |
Use the premium actually quoted by your lender. The cash-on-cash denominator includes only the down payment: legal fees, transfer taxes, premium sales tax and other closing costs are not collected. Repairs, utilities, major works and reserves are also excluded, and the results are before income tax. A complete acquisition budget will usually contain more than this focused estimate.
The Interest Act addresses annual or half-yearly interest disclosure on blended-payment mortgages. This tool follows the specified Canadian semi-annual calculation; check whether that convention matches your particular loan. CMHC supplies the rental premium schedule and eligibility limits. The Canada Revenue Agency distinguishes income-tax expenses from capital amounts, including mortgage principal. A cash shortfall is therefore not necessarily a deductible rental loss.
Ask a mortgage professional about insurance eligibility, the quoted rate or a different payment arrangement. Consult an accountant or tax advisor for corporate ownership, non-residency, mixed personal use or capital deductions, and a lawyer for ownership and tenancy obligations. This calculator does not assess loan qualification or produce an income-tax return.
Start with rent after vacancy, subtract the listed operating costs and then subtract mortgage payments. This calculator treats property tax and insurance as annual amounts, condo fees as monthly and management as a percentage of collected rent. Its result is before income tax and excludes costs that are not entered.
There is no universal target. A positive estimate leaves money after the payments included here, but repairs, major works, tax and purchase costs can change the outcome. Compare the result with a separate cash reserve and a complete budget for your property.
Divide annual operating income before borrowing by the purchase price, then multiply by 100. Operating income here is rent after vacancy and the listed running costs. Mortgage payments and the financed CMHC premium affect cash flow but do not change this cap rate.
That depends on your taxable rental profit, other income, province, ownership and deductions. This tool calculates before-tax cash flow only. Mortgage principal reduces cash but is not an income-tax deduction. Ask an accountant or tax advisor to check the tax treatment of interest, expenses and capital costs.
Check provincial guidelines, timing and exemptions before you give notice.
Estimate cash left in the deal and monthly cash flow after a Canadian refinance, with the 80% planning cap and CMHC insured refinance rules.
See what remains after running costs, mortgage payments and income tax.
See the weekly and annual effect of rent, costs, borrowing and income tax.
