What's the difference between amortization and term?
Amortization is the total time it would take to pay the mortgage off, often 25 or 30 years. The term is how long your current rate and conditions last, often five years. When the term ends, you renew on the balance that's left, usually at a new rate. That's why the calculator shows your balance at the end of the term.
Why the early years feel so slow
Interest is charged on what you still owe, so the balance is doing most of the damage at the start. On a $750,000 mortgage at a sample 4.5% fixed rate over 25 years, the monthly payment is about $4,151. About $2,786 of the first payment is interest and only about $1,365 goes to the balance. Over the full 25 years, the interest adds up to about $495,000 if the rate never changes.
How much can extra payments save?
Every extra dollar goes straight to the balance, which means less interest on every payment after it. Using the same example:
- An extra $250 a month saves about $55,000 in interest and pays the mortgage off about two years and five months sooner.
- A $10,000 lump sum at the end of every year saves about $139,000 and pays it off about six years and four months sooner.
Paying down a mortgage isn't automatically the best use of your money. It depends on your rate, your debts and your other goals, so that's a good conversation to have with your financial advisor.
Can you pay extra without a penalty?
Up to a limit, usually. Prepayment privileges vary by lender and are often a percentage of the original mortgage amount. Paying more than your privilege on a closed mortgage can trigger a penalty, so check your mortgage agreement or ask your lender before you make a large payment. The calculator doesn't apply these limits for you.
What do accelerated payments do?
Regular payments every two weeks cost about the same per year as monthly payments, just split up. Accelerated payments are half the monthly payment every two weeks, or a quarter of it every week. Because there are 26 or 52 payments a year, you end up paying the equivalent of one extra monthly payment each year, and all of that extra goes to the balance. In the calculator, "no prepayments" keeps whichever payment schedule you pick.
Why fixed and variable are calculated differently
Canadian fixed-rate mortgages generally compound twice a year, and variable-rate mortgages often compound monthly, which is how this calculator handles them. Your mortgage agreement states how yours works. Variable payments can also change with your lender's prime rate, which this calculator doesn't try to predict.
Before you buy
Start with the mortgage calculator for your payment, down payment, insurance and stress test, then add the property transfer tax. My free Buyer's Guide walks through every step.
Checked November 3, 2026 against the Financial Consumer Agency of Canada (paying off your mortgage faster, prepayment rights). Examples use a sample rate and assume it never changes. This calculator is a general estimate, not financial advice. Results are deemed accurate but not guaranteed; verify with your lender or mortgage broker.