Enter the amount, the rate and the amortisation period to see your payment, the total interest and the year-by-year schedule. Add an extra payment to see how much time and interest it saves.
This is an estimate for information only. It is not an offer of credit and does not replace the figures given by your lender.
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A mortgage is repaid by a constant payment. Each payment covers the interest that has accrued on the outstanding balance, and whatever is left reduces the principal. Because the balance falls, so does the interest portion — which is why the first years are mostly interest and the last years mostly principal.
The payment itself is fixed by the annuity formula: it is the amount that brings the balance to exactly zero after the agreed number of payments. The calculator also builds the real schedule, rounding each payment to the cent the way a lender does, and lets the final payment absorb the rounding difference.
Two settings change the result more than people expect. The first is the compounding convention: at the same stated rate, a mortgage compounded twice a year costs slightly less than one compounded monthly. The second is the payment frequency: an accelerated bi-weekly schedule is simply half the monthly payment paid 26 times a year, which is thirteen monthly payments instead of twelve — enough to cut years off a long mortgage.
P = L × i ÷ (1 − (1 + i)^−n)
When the rate is zero the formula degenerates and the payment is simply L ÷ n.
i = (1 + j ÷ c)^(c ÷ p) − 1
When c = p this reduces to i = j ÷ p, the familiar monthly rate.
interest = balance × i principal = P − interest
With monthly payments and monthly compounding, the rate per period is 5.25 % ÷ 12 = 0.4375 %, and there are 300 payments.
The payment comes to about 2 097 per month. Over the full term that is roughly 629 000 paid in total, of which around 279 000 is interest — about 80 % of the amount borrowed.
The accelerated bi-weekly payment is half the monthly payment, about 1 048, paid 26 times a year. That is one extra monthly payment every year.
The loan is repaid roughly three years early and the interest saved runs to tens of thousands — without ever changing the rate or renegotiating anything.
Almost always because of the compounding convention or the first payment date. Canadian mortgages compound semi-annually, which gives a lower payment than monthly compounding at the same stated rate. Some lenders also finance fees into the loan, which raises the amount being amortised.
Set the compounding option to match your contract and add any financed fees to the loan amount, and the numbers usually line up to the cent.
They are the simplest way to shorten a mortgage, because they do not require negotiating anything. An accelerated bi-weekly schedule pays 26 half-payments a year — the equivalent of 13 monthly payments rather than 12. On a 25-year mortgage that typically removes about three years and a large share of the interest.
The catch is cash flow: you pay roughly 8 % more per year. Check that the extra fits your budget before committing.
In this calculator, yes — that is the standard treatment for a prepayment. Every extra amount reduces the balance directly, so all the interest that balance would have generated disappears with it.
In a real contract, check the prepayment terms. Many mortgages cap the amount you may prepay each year without a penalty.
Mortgage default insurance, appraisal and legal fees, title costs and any variable-rate change. Property tax and home insurance are included only if you enter them, and they are shown separately from the loan payment because they are not part of the amortisation.
In countries where a mortgage runs in short terms inside a long amortisation — five years inside twenty-five, for example — you renew at the rate available then. This calculator assumes the rate you entered applies for the whole amortisation, which is the right way to compare scenarios, but not a forecast of what you will actually pay after renewal.
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