Mortgage prepayment calculator
How much sooner could you be mortgage-free? This shows what a yearly lump sum, a higher payment or an accelerated schedule could each change, in years and in interest, and whether the amounts fit within the prepayment limits most Canadian mortgages allow. Nothing you enter leaves your browser, and there is no sign-up.
Your mortgage today
Lump sums
On these figures your yearly limit is about $90,000.
Your regular payment
Accelerated schedules are biweekly or weekly. Choose one of those above to try it.
Estimate · when the mortgage could be paid off
Mortgage-free in 15 years 2 months, 6 years 10 months sooner
As it stands, the mortgage would be paid off in 22 years. The scenario suggests the prepayments entered could save about $4,762 in interest over the next 5 years, and about $94,179 over the life of the mortgage if the rate stayed where it is.
| Side by side | As it stands | With prepayments |
|---|---|---|
| Payment | $2,975 a month | $2,975 a month |
| Lump sums paid in total | $0 | $150,000 |
| Interest over the next 5 years | $103,552 | $98,789 |
| Balance when the term ends | $425,023 | $370,260 |
| Interest over the life of the mortgage | $285,526 | $191,347 |
| Paid off in | 22 years | 15 years 2 months |
Estimates based on the information entered, using the Canadian semi-annual compounding standard. Figures over the next 5 years are the dependable ones. Life-of-mortgage figures and the payoff date assume today’s rate holds after every renewal, which it will not, so treat them as a way to compare options rather than a forecast. Your lender’s numbers will differ.
For informational purposes only — consult a licensed mortgage professional before deciding.
Estimate · assumes today’s rate throughout, which it will not be after renewal
How the estimate works
Two runs of the same mortgage
The mortgage is worked out payment by payment twice: once as it stands, with the payment that clears it over the amortization you have left, and once with your prepayments added. Every figure in the result is the difference between the two. Interest compounds semi-annually, as it does on Canadian fixed-rate mortgages.
Lump sums and payments
A one-time lump sum comes off the balance today. A yearly lump sum comes off on each anniversary, starting a year from now. A payment increase is added to every payment, and an accelerated schedule takes the monthly payment and divides it by two or four, which adds up to one extra monthly payment a year. All of it goes straight to principal.
Prepayment limits
Most lump-sum privileges are 10% to 20% of the amount you originally borrowed, each year, and most payment-increase privileges are between 10% and 100%. The calculator flags an amount above the limit you select. It does not charge a penalty on the excess; it simply lets you know the amount may not be allowed during the term.
What to read with care
Interest over your current term is dependable, because your rate is set until then. The payoff date and the lifetime saving assume today’s rate carries on after every renewal, which it will not. Treat them as a way to compare options rather than a forecast. For the renewal itself, the renewal calculator shows what a lump sum at renewal does to the new payment.
Common questions
- How much can I prepay on my mortgage without a penalty?
- Most Canadian mortgages have two prepayment privileges. A lump-sum privilege, usually 10% to 20% of the original amount borrowed each year, and a payment-increase privilege, usually somewhere between 10% and 100% of the regular payment. The exact figures are in the prepayment section of your mortgage contract, along with whether the yearly allowance resets on the calendar year or on your anniversary date. Unused allowance usually does not carry over.
- Is a lump sum or a higher payment better for paying off a mortgage faster?
- Dollar for dollar they do much the same thing: every extra dollar goes straight to principal, and the earlier it goes in, the more interest it avoids. The difference is mostly practical. A higher payment works automatically and suits a steady budget, while a lump sum suits money that arrives once a year, such as a bonus or a tax refund. The calculator lets you try either, or both, and see the effect on your own numbers.
- How much do accelerated biweekly payments save?
- An accelerated biweekly payment is your monthly payment divided by two, paid 26 times a year, which adds up to one extra monthly payment each year. On a typical mortgage with 20 to 25 years left, that usually takes two to four years off the amortization. Plain biweekly payments, sized to match the monthly schedule, save very little, because the saving comes from paying more rather than from paying more often.
- Why is the interest saved over my term so much smaller than over the life of the mortgage?
- Because interest avoided compounds. A prepayment saves a little interest every month for as long as the mortgage would otherwise have run, so most of the saving arrives in the later years. The figure over your current term is the dependable one, since your rate is set until then. The lifetime figure assumes today's rate carries on after every renewal, which it will not, so it is best read as a way to compare options rather than as a forecast.
- What happens if I prepay more than my privilege allows?
- During a term, the part above the privilege is usually treated like breaking the mortgage early and can carry a prepayment penalty, typically three months' interest or an interest rate differential on the excess. At renewal, when the term has ended, most lenders accept any amount without a penalty, which is why some people save up and prepay then. You may wish to confirm your own lender's rules before sending a large payment.
- Is anything I enter stored or shared?
- No. The calculator runs entirely in your browser and nothing you type is sent to us.