What does my full amortization schedule look like — and what do extra payments save me? See your payment, payoff time, total interest and a year-by-year schedule, then test extra payments and a lump sum to see the interest and time you could save.
Calculate your amortization
How amortization works
Canadian mortgages use a nominal rate compounded semi-annually. The periodic rate is (1 + r/2)^(2/periods per year) − 1, so the monthly rate is (1 + r/2)^(2/12) − 1 and the bi-weekly rate is (1 + r/2)^(2/26) − 1. The payment is amount × i / (1 − (1+i)^−n), where n is the number of payments in the amortization. At a 0% rate there is no interest to divide by, so the payment is simply the amount divided by the number of payments.
Each payment first covers the interest charged for that period, and the rest goes to principal. Extra payments go straight to principal, which lowers the balance, so less interest is charged on every payment after that. A lump sum is applied at the start of the year you choose, before that year’s interest is charged. The final payment is a partial payment that brings the balance to exactly $0.
Accelerated bi-weekly means paying half the monthly payment every two weeks — 26 half-payments a year, which is the same as 13 monthly payments. That extra monthly payment each year shortens the amortization. Regular bi-weekly, by contrast, divides the monthly payment into 26 payments that add up to 12 monthly payments.
Estimates only. Your lender’s exact schedule depends on its payment dates, rounding and any prepayment limits in your mortgage contract.
Frequently asked questions
What is the difference between bi-weekly and accelerated bi-weekly?
Regular bi-weekly splits the monthly payment in two but still adds up to 12 monthly payments a year. Accelerated bi-weekly pays half the monthly payment every two weeks, which adds up to 13 monthly payments a year — and that extra payment goes to principal and shortens your amortization.
How much can extra payments really save?
It depends on the size of the extra payment, the rate and how much time is left. Even a modest extra amount each payment reduces the balance sooner, so every later payment charges less interest. Enter your extra amount above to see the interest saved and the months saved for your own mortgage.
Why does the balance fall slowly at first?
Early in the amortization most of each payment is interest, because the balance is at its largest. As the balance falls, the interest portion shrinks and more of each payment goes to principal — the year-by-year table above shows that shift.
What happens with a 0% interest rate?
With no interest, every payment goes straight to principal, so the payment is the mortgage amount divided by the number of payments, and the total cost is the amount itself.
Related tools
Work out a payment for a new mortgage with the Canadian Mortgage Calculator, and compare renewal offers with the Mortgage Renewal Calculator.