Mortgage amortization calculator

It’s a table that splits every payment into interest and principal and shows the balance left after each one. Early on, most of each payment is interest; as the balance falls, more of it goes to principal. This calculator shows the schedule year by year and every payment in year 1.

Fixed-rate Canadian mortgages compound semi-annually, so the rate is converted into an effective rate per payment before the payment is worked out. A $500,000 mortgage at 4.5% over 25 years works out to $2,767.36 a month, with about $330,209 of interest over the full amortization.

Interest is charged on the balance you still owe, which is highest at the start. On a $500,000 mortgage at 4.5% over 25 years, year 1 costs about $22,066 in interest and pays down only about $11,142 of principal.

The amortization is how long it takes to pay off the whole mortgage, often 25 years. The term is how long your rate and conditions last, often 5 years, after which you renew on the remaining balance. With $500,000 at 4.5% over 25 years paid monthly, you’d still owe about $438,982 at the end of a 5-year term.

With less than 20% down, CMHC insured mortgages are generally limited to 25 years, or 30 years if at least one borrower is a first-time buyer or the home is newly built. With 20% or more down, the mortgage is uninsured and many lenders offer up to 30 years.

It depends on how much and how early. Adding $10,000 at the end of every year to a $500,000 mortgage at 4.5% over 25 years paid monthly cuts the interest by about $120,933 and pays the mortgage off about 8.4 years sooner.

Yes, every extra dollar goes straight to principal. Raising the monthly payment on a $500,000 mortgage at 4.5% over 25 years by 10%, from $2,767.36 to $3,044.10, saves about $56,757 of interest and about 3.8 years.

Yes. You pay half the monthly payment every two weeks, which adds up to one extra monthly payment a year. On $500,000 at 4.5% over 25 years, that’s $1,383.68 every two weeks, and the mortgage is paid off in about 21.7 years with about $50,078 less interest. Regular bi-weekly payments, by contrast, keep the 25-year amortization.

It depends on your contract. Many lenders allow a yearly lump sum of 10% to 20% of the original amount and a payment increase of a similar size, and the Financial Consumer Agency of Canada notes these privileges vary by lender. Paying more than your allowance can trigger a prepayment penalty.