Cash-on-Cash Return Calculator Canada

Why cash-on-cash needs a real mortgage rate

Unlike cap rate, this calculator's cash-on-cash figure runs the numbers through an actual mortgage payment — it takes your purchase price, down payment, interest rate, and loan term, calculates the loan amount and monthly payment, then subtracts twelve months of that payment from annual NOI before dividing by cash invested. That means the interest rate field isn't decorative: move it by half a point and the cash-on-cash result moves with it, often by more than the rate change itself once leverage is factored in.

Three Bank of Canada reference points, as of mid-September 2026, are worth checking your own quote against. The target for the overnight (policy) rate has held at 2.25% since the October 2025 cut. Chartered banks' prime lending rate sat at 4.45% for the three weeks ending September 16, 2026 — each institution sets its own prime, influenced by but not identical to the policy rate. And the posted 5-year conventional mortgage rate was 6.09% across those same three weeks. That posted figure runs well above what most borrowers actually get quoted at a discount — it's a ceiling reference, not a shopping target — but it's the number lenders use as their starting point, and worth knowing before you assume a rate for this calculator.

The rate you'll qualify at isn't the rate you'll pay

A 20%-or-more down payment puts an investment purchase into uninsured-mortgage territory, and federal banking regulator OSFI requires every federally regulated lender to qualify uninsured borrowers at a minimum qualifying rate — the greater of the contract rate plus 2 percentage points, or a 5.25% floor. That's a qualification hurdle, not the rate charged on the loan: you'll make payments at your actual contract rate, but the lender first checks whether you could still service the debt at the higher of those two numbers. For an investor already running tight cash-on-cash numbers, this doesn't change the calculator's output, but it does mean the lender is stress-testing the exact scenario this page lets you model — a materially higher payment than your quoted rate implies.

Closing costs vary by province — and they're part of the denominator here

This calculator's cash-invested figure is down payment plus closing costs plus rehab — all three inflate the denominator and pull cash-on-cash down, which is exactly why it differs from the site's plain rental property calculator (that one uses down payment alone). Land transfer tax is set provincially, not federally. In Ontario, for example, the provincial land transfer tax runs in brackets from 0.5% on the first C$55,000 up to 2.0% above C$400,000 (2.5% above C$2,000,000 for one-or-two-unit residential land) — before any municipal top-up in Toronto specifically. On a C$650,000 Ontario purchase outside Toronto, that bracket math works out to C$9,475 in provincial land transfer tax (C$275 + C$1,950 + C$2,250 + C$5,000 across the four brackets), on top of legal fees, title insurance, and inspection costs — all cash that leaves your pocket before day one of rent, and all of it belongs in this calculator's cash-invested field.

The provincial gap is real: on that same C$650,000 purchase, British Columbia's property transfer tax — 1% on the first C$200,000 and 2% on the portion up to C$2,000,000 — comes to C$11,000, while Québec's base welcome tax — 0.5% up to C$62,900, 1.0% from C$62,900 to C$315,000, and 1.5% above that — comes to about C$7,861 before any municipal variation (Montréal and Québec City both run their own brackets on top of the provincial base). None of these investor-relevant first-time-buyer rebates apply to a pure rental purchase, so the full bracket total is what belongs in your cash-invested field regardless of province.

What cash-on-cash return doesn't count

The figure this calculator returns is pre-tax and pre-CCA. CRA lets a landlord claim capital cost allowance on the building (commonly Class 1, at 4%) and on furniture and equipment (Class 8, at 20%), which can shelter some rental income from tax — a real benefit that doesn't show up anywhere in a cash-on-cash calculation, because that calculation is about cash flow, not taxable income. It also assumes you're holding, not flipping: if you sell within 365 consecutive days of purchase, CRA's residential property flipping rule deems the entire gain fully taxable as business income — no capital-gains treatment and no principal residence exemption — which changes the after-tax math on an early exit far more than anything this calculator's cash-flow figure captures.

A Toronto purchase roughly doubles the Ontario land transfer tax figure above

The C$9,475 provincial figure above was deliberately calculated outside Toronto, because the city adds its own tax on top. Toronto's Municipal Land Transfer Tax runs on brackets identical to Ontario's provincial LTT through the C$2,000,000 tier — 0.5% to C$55,000, 1.0% to C$250,000, 1.5% to C$400,000, 2.0% above C$400,000 — which means a C$650,000 Toronto purchase owes a second C$9,475 in municipal tax on top of the C$9,475 provincial figure: C$18,950 combined, before legal fees, title insurance, or land transfer registration charges enter the cash-invested denominator at all. A first-time buyer can offset part of that: Toronto's own MLTT rebate tops out at C$4,475, and the province's separate LTT refund for first-time buyers caps at C$4,000 — but neither rebate applies to an investment purchase that isn't your principal residence, so a pure rental buy in Toronto should model the full C$18,950 in the cash-invested field, not a first-time-buyer-discounted figure.