Definitions

Original mortgage amount
The original amount financed with your mortgage, not to be confused with the remaining balance or principal balance.

Interest rate
Annual interest rate. Maximum interest rate is 20%. All Canadian mortgages use semi-annual compounding of interest.

Mortgage amortization (years)
Total length of your original mortgage in years. Most common lengths are 20 years and 25 years.

Accelerated weekly and bi-weekly payments
Accelerated weekly and accelerated bi-weekly payment options are calculated by taking a monthly payment schedule and assuming only four weeks in a month. We calculate an accelerated weekly payment, for example, by taking your normal monthly payment and dividing it by four. Since you pay 52 weekly payments, by the end of a year you have paid the equivalent of one extra monthly payment. This additional amount accelerates your loan payoff by going directly against your loan's principal. The effect can save you thousands in interest and take years off of your mortgage.

he accelerated bi-weekly payment is calculated by dividing your monthly payment by two. You then make 26 bi-weekly payments. Just like the accelerated weekly payments you are in effect paying an additional monthly payment per year.

Number of years remaining
This is the total number of years you have left to pay on your mortgage. The earlier you start your payoff plan, the more interest you can save. Just starting a few years earlier can really add up.

Prepayment type
This is the type of prepayment you are going to make. You can choose from one time, monthly, weekly, bi-weekly, semi-monthly or yearly.

Additional payment
Your proposed extra payment per period, e.g. weekly, bi-weekly, semi-monthly, etc. This payment will be used to reduce your principal balance.

Disclaimer: Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We can not and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.