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Mortgage Payment Calculator

Calculate your mortgage payments. Then evaluate different mortgage scenarios to minimize your borrowing costs.

Meet the mortgage payment calculator

To reduce interest expense, you first need to know how much your desired mortgage will cost.

This mortgage payment calculator will estimate exactly that. You can set everything from your amortization and payment frequency to extra payments. The calculator then determines your monthly mortgage payment and provides an amortization schedule showing how fast it will take to whittle down your principal.

How to use this mortgage payment calculator

Our mortgage payment calculator computes payments based on your home value, equity, mortgage term and amortization.

To calculate your mortgage payment:

  • Select your mortgage type: purchase, refinance or renewal
  • Input the province, home value, down payment / mortgage amount and amortization period
  • Choose your desired mortgage term and rate type

The calculator will update the calculations each time you change a number.

Tip: If you’re renewing or refinancing your mortgage, select the Renewal/Refinance tab to estimate your potential mortgage payments without having to input a down payment.

You can even compare two rates side by side to see which saves you more.

The mortgage payment calculator in action

Here’s an example of how payments change based on frequency, assuming a $100,000 mortgage at 3% interest amortized over 25 years.

If you switch from monthly to accelerated weekly payments, for example, you'll increase your repayment frequency from 12 monthly payments to 52 weekly payments. That can shave two years and 10 months off your mortgage, versus monthly payments (assuming a standard 25-year amortization).

Similarly, if you switch from monthly to an accelerated bi-weekly payment schedule, you’ll increase your repayment frequency from 12 monthly payments to 26 bi-weekly payments. This means you’ll make a payment every two weeks. That too adds up to one extra monthly payment over the course of a year. As with accelerated weekly, accelerated bi-weekly payments shave about two years and 10 months off your mortgage, versus monthly repayment.

What is amortization?

Amortization is the amount of time required to pay your mortgage in full. Your payments are spread out over this period.
The longer the amortization, the smaller your payments, and vice versa.

Tip: Amortization differs from “term.” Term refers to the length of your mortgage contract. In other words, it’s the amount of time your interest rate discount is guaranteed. Your remaining term is the amount of time left until your mortgage matures. Once your term is up, you can pay off the mortgage without penalty or renew into a new term.

If your mortgage is default insured, the maximum allowable amortization is 25 years.

If you have 20% equity or more, however, you don’t need mortgage insurance. In that case, your amortization can extend out to 30 years, or 35 years for higher-cost non-prime mortgages.

“Each year, about one-third of mortgage holders make new efforts to shorten their actual amortization periods,” says Mortgage Professionals Canada (MPC). People do this, it says, “by increasing the regular payment to more than is required, by making a lump sum payment, or changing the payment frequency.”

How do you lower your mortgage payments?

These are the most common ways to lower your mortgage payments:

  • Lower the purchase price (perhaps by finding a cheaper home)
  • Make a bigger down payment
  • Find a lower interest rate
  • Extend the amortization
  • Don’t choose “accelerated” payments

Of course, the less you pay over a given timeframe, the more interest expense you’ll incur.

How do you lower your interest expense?

These are the most common ways to lower your interest costs. Some of these methods are similar to above and some are the exact opposite:

  • Lower the purchase price (perhaps by finding a cheaper home)
  • Make a larger down payment
  • Find a lower interest rate
  • Reduce the amortization
  • Choose “accelerated” payments
  • Make lump-sum prepayments

Things that save you interest generally lower your amortization, resulting in you paying off your mortgage sooner.

What’s the fastest way to pay off my mortgage?

The fastest way to hammer down your loan principal is with big lump-sum prepayments.

Barring that, opting for accelerated mortgage payments is the next best thing.

How do lump-sum payments affect my mortgage?

About 900,000 borrowers made a total of $23 billion in lump-sum mortgage prepayments in 2019, according to MPC.

A lump-sum mortgage payment is a one that’s applied directly towards your mortgage principal. Depending on your lender, you may be allowed to prepay up to 5%, 10%, 15%, 20%, 25% or 30% of the original principal amount of your mortgage each year.

Even if you pay small amounts, the effect is magnified over time, reducing your interest expense every month until the mortgage is paid off.

Lump-sum prepayments also help increase your home equity faster. If necessary, that allows you to use your equity for further borrowing someday, such as adding a HELOC.

The average lump-sum prepayment in 2019 was $19,100, reports MPC.

What mortgage payment options do I have?

The frequency of your mortgage payments can be monthly, weekly or bi-weekly, depending on your mortgage terms and conditions.

Mortgage payments can be made in the following ways:

  • Monthly mortgage payments
  • Bi-weekly mortgage payments
  • Weekly mortgage payments
  • Bi-weekly accelerated payments
  • Weekly accelerated payments
  • Semi-monthly (twice a month, e.g., on the 1st and 16th of each month.

“Accelerated” payments help you pay off your mortgage quicker compared to other payment schedules, helping you avoid thousands of dollars in interest. About 350,000 borrowers increased their payment frequency in 2019, found MPC.

When you choose to make accelerated mortgage payments, you end up making the equivalent of 13 monthly payments per year. The result is that you pay off the mortgage years earlier, saving thousands of dollars on interest.

Here’s an example of how payments change based on frequency, assuming a $100,000 mortgage at 3% interest amortized over 25 years.

Frequently asked questions about our mortgage payment calculator

Here are some of the most-asked mortgage payment questions:

Is this calculator accurate?

Yes, to the extent your inputs are accurate.

If I can afford my payment can I get a mortgage?

It depends. If you use an actual rate to calculate your payments, that payment may be lower than the theoretical payment a lender requires you to afford. We’re referring here to the “mortgage stress test.” The government’s stress test requires that you prove you can afford a payment based on a rate that is typically 2+ percentage points higher than actual rates.

Does your calculator include default-insurance fees?

No. If you’re getting an insured mortgage, you’ll need to manually add insurance premiums to the loan amount yourself. Then calculator will then return the correct payment.

How do I pay less interest than principal?

On a standard 25-year amortization, if your interest rate is less than 2.80% you’ll pay more principal than interest on every payment.

When are mortgage payments due?

For monthly payments, the most common date is the first of each month. But confirm your case directly from your lender.

Does this calculator take fluctuations in prime rate into account for variable-rate mortgages?

No. It assumes your interest rate will remain the same for the entire term.

Can I pay less often than monthly?

No, not with a mainstream lender like a bank.

Can I go back to monthly payments once I increase my payment frequency?

Increasing your ongoing payment frequency is supposed to be a permanent move. But most lenders allow you to revert to monthly payments if you need to.

Which is more important, reducing payments or reducing interest?

That depends on what you’re going to do with the payment savings. For example, if you extend your amortization and use the payment savings to pay down a high-interest credit card quicker, that’s more beneficial than paying your mortgage faster.

Is a lower rate always better?

No. If you have the ability to make prepayments, larger prepayment privileges can be more beneficial than a slightly lower rate, other things equal. Lenders often limit prepayment flexibility with deep-discount “low frills” rates.

Determining the best mortgage

Once you have a good idea of what your mortgage payments look like, try using the best Canadian mortgage rates to see how much you can save. Also explore our Mortgage Guides to learn more about mortgage payments and everything else you need to know when it comes to choosing the ultimate mortgage.

*Mortgage payment calculator disclaimer:

The mortgage payment calculator is intended to help you compare different mortgage options and understand your expected payment schedule. However, the mortgage payment calculation should not be used in isolation to influence your mortgage decision-making. Be sure to consult with a mortgage broker or lender about the various mortgage financing and payment options you can take advantage of. We'll be happy to connect you with a licensed mortgage advisor. The best bet is to first start with analyzing different mortgages, which you can do on RATESDOTCA here.

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