Year-by-year breakdown
How much of each year’s payments goes to principal and to interest, and what is left owing at year end.
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | $10,386.21 | $24,510.03 | $489,613.79 |
| 2 | $10,912.03 | $23,984.21 | $478,701.76 |
| 3 | $11,464.44 | $23,431.80 | $467,237.32 |
| 4 | $12,044.82 | $22,851.42 | $455,192.50 |
| 5 | $12,654.59 | $22,241.65 | $442,537.91 |
| 6 | $13,295.25 | $21,600.99 | $429,242.66 |
| 7 | $13,968.31 | $20,927.93 | $415,274.35 |
| 8 | $14,675.45 | $20,220.79 | $400,598.90 |
| 9 | $15,418.39 | $19,477.85 | $385,180.51 |
| 10 | $16,198.97 | $18,697.27 | $368,981.54 |
| 11 | $17,019.02 | $17,877.22 | $351,962.52 |
| 12 | $17,880.62 | $17,015.62 | $334,081.90 |
| 13 | $18,785.83 | $16,110.41 | $315,296.07 |
| 14 | $19,736.86 | $15,159.38 | $295,559.21 |
| 15 | $20,736.05 | $14,160.19 | $274,823.16 |
| 16 | $21,785.80 | $13,110.44 | $253,037.36 |
| 17 | $22,888.71 | $12,007.53 | $230,148.65 |
| 18 | $24,047.44 | $10,848.80 | $206,101.21 |
| 19 | $25,264.85 | $9,631.39 | $180,836.36 |
| 20 | $26,543.89 | $8,352.35 | $154,292.47 |
| 21 | $27,887.66 | $7,008.58 | $126,404.81 |
| 22 | $29,299.48 | $5,596.76 | $97,105.33 |
| 23 | $30,782.78 | $4,113.46 | $66,322.55 |
| 24 | $32,341.14 | $2,555.10 | $33,981.41 |
| 25 | $33,981.41 | $917.83 | $0.00 |
How Canadian mortgage interest is calculated
Section 6 of the Interest Act requires a mortgage on real property to state its rate “yearly or half-yearly, not in advance”. In practice, lenders compound fixed rates twice a year, and variable rates monthly.
Fixed rate
Quoted rate ÷ 2 is added to the balance twice a year. A 6% fixed mortgage therefore costs the same as an effective 6.09% a year, or 0.493862% a month.
Variable rate
Interest is usually compounded monthly: a 6% rate is 0.5% a month. Always check your lender’s mortgage terms.
The payment
Payment = amount × i ÷ (1 − (1 + i)^−n), where i is the rate for one payment period and n is the number of payments.
US calculators compound monthly. Using one for a Canadian fixed-rate mortgage overstates the payment: for $500,000 at 5% over 25 years, $2,923 instead of $2,908.
Choosing a payment frequency
The rate is the same; what changes is how often you pay.
Monthly / semi-monthly
Twelve or twenty-four payments a year, lined up with a monthly or twice-a-month pay cycle.
Bi-weekly / weekly
The monthly payment is re-worked for 26 or 52 payments a year at the same amortization. Smaller payments, with about the same overall interest.
Accelerated
Half (bi-weekly) or a quarter (weekly) of the monthly payment, paid 26 or 52 times. That adds up to one extra monthly payment a year and shortens the amortization by a few years.
Frequently asked questions
Why does a Canadian mortgage calculator give a lower payment than a US one?
Canadian fixed-rate mortgages compound interest semi-annually (Interest Act, s. 6), which makes the monthly rate slightly lower than rate ÷ 12. US calculators compound monthly, so for the same quoted rate they show a higher payment.
What is the difference between amortization and term?
Amortization is the total time to pay the loan off, usually 25 years (up to 30 for insured mortgages in some cases). The term is the length of your contract with the lender, often 1 to 5 years. At the end of the term you renew at the rates then on offer, and the balance shown above is what you would renew.
Are accelerated payments worth it?
Accelerated bi-weekly payments equal half the monthly payment but are made 26 times a year, so you pay the equivalent of 13 monthly payments. This pays down principal faster, and the calculator shows how many months or years that saves.
Does this include the CMHC premium?
No. If your down payment is under 20%, the premium can be added to your mortgage. Add it to the mortgage amount yourself, using the CMHC premium calculator on this site.
What is the maximum amortization?
Uninsured mortgages with a lender can go up to 30 years or more, and insured mortgages are limited to 25 years, except for first-time buyers and buyers of new builds, who can choose 30 years since December 15, 2024. This calculator accepts any value up to 40 years for planning.
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How we check it
The tests reproduce a published worked example from York University: $100,000 at 6% compounded semi-annually over 25 years gives a $639.81 monthly payment and $89,836.47 owing after a 5-year term. They also compare the payment with a separate bisection search that simulates the schedule month by month, and with the standard annuity formula for monthly compounding.
We did not compare the output with a specific lender’s or the Financial Consumer Agency of Canada’s calculator. Lenders round payments and interest differently, so expect differences of a few cents. Prepayments and rate changes at renewal are not modelled.