As simple as it sounds, let's have a quick look at how the total loan amount is derived. In the example shown in the image, the purchasers are buying a property for $265,000 and are putting $17,500 (~6.5%) of their savings in as down payment. They then need to borrow the balance or $247,500 to have enough to complete their purchase. Further, as their down payment is under 20%, they are also required to purchase Mortgage Default Insurance, say from CMHC, and the premium of $9900 is added to the base loan amount to arrive at a total loan amount of $257,400. This total loan amount is then used in a calculation to figure out their monthly repayment amount.
Often when borrowers are using online mortgage calculators trying to do their own scenarios, they fail to add in the mortgage default insurance premium to come up with the total loan amount. If you want to confirm the payment above, give our Mortgage Payment Calculator a whirl using $257400 as the total loan and 25 years amortization and 3.54%. You should arrive at a monthly payment of of $1290.56.