Amortisation Calculator — Canada

Generate a complete monthly payment schedule showing exactly how much goes to principal and interest each month for Canadian loans.

Loan Details

Loan Amount

Annual Interest Rate (APR)

Amortization Period

Years

Start Date

Summary

Enter loan details to generate amortisation schedule

Amortisation Calculator Canada — See Exactly Where Every Dollar Goes

A Canadian amortisation schedule is the complete payment-by-payment breakdown of your loan — showing exactly how much of each monthly payment goes to interest versus principal, and your remaining balance after each payment. For Canadian homeowners with a 25-year mortgage, this schedule reveals the same striking truth as anywhere: in the early years, the vast majority of your payment is pure interest. Understanding this helps you make smarter decisions about prepayments, renewal negotiations, and accelerated payment strategies.

On a $450,000 CAD mortgage at 5.5% over 25 years, your monthly payment is approximately $2,748. In month 1: about $2,063 goes to interest, only $685 to principal. By year 10, the split improves but interest still dominates for many years. This is why making extra payments and using accelerated bi-weekly payments makes such a dramatic difference — those early extra payments eliminate interest on the largest possible outstanding balance.

What is Loan Amortisation in Canada?

Amortisation is the process of paying off a loan through scheduled, equal periodic payments over time. In Canada, the amortisation period is distinct from the mortgage term — the amortisation is the total time to pay off the mortgage (typically 25 years), while the term is how long your current rate is locked in (typically 5 years).

Canadian mortgages are almost always fully amortising — meaning every scheduled payment is calculated so the loan reaches exactly $0 at the end of the amortisation period. The standard maximum amortisation for insured mortgages (down payment under 20%) is 25 years; for uninsured mortgages (20%+ down payment), 30 years was extended to first-time buyers and new construction in 2024.
The Interest Act of Canada requires lenders to state mortgage interest rates as semi-annual compounding (not monthly). This means the Canadian effective monthly rate is slightly different from simply dividing the annual rate by 12. This calculator uses simple monthly compounding as an approximation.
Extra principal payments permanently alter the amortisation schedule — reducing the outstanding balance means less interest accrues each month, effectively shortening the amortisation period. At renewal, you can also choose to shorten your amortisation from 25 to 20 years if your financial position has improved.
Most Canadian mortgage products are closed during the term, meaning you can only make extra payments within your prepayment privileges (typically 10%–20% of the original balance per year) without paying a prepayment charge.

How to Use This Calculator

Enter the Loan Amount in CAD (e.g., $450,000 for a mortgage or $25,000 for a personal loan).
Enter the Annual Interest Rate — your loan's APR (e.g., 5.5%).
Set the Amortisation Period — 25 years for most Canadian mortgages; 3–7 years for personal loans.
Optionally enter a Start Date to see exact payment dates and your payoff date.
Click Generate Schedule — view the complete month-by-month schedule and annual summaries.

Amortisation Formula

Monthly Payment = P × r × (1 + r)ⁿ / [(1 + r)ⁿ − 1]

Monthly Interest = Remaining Balance × (APR ÷ 12 ÷ 100)
Principal Paid = Monthly Payment − Monthly Interest
New Balance = Previous Balance − Principal Paid
Example: $450,000 CAD at 5.5%, 25 years — Monthly Payment ≈ $2,748
Month 1: Interest ≈ $2,063 | Principal ≈ $685 | Balance ≈ $449,315
Month 120 (Year 10): Interest ≈ $1,756 | Principal ≈ $992 | Balance ≈ $383,000

Key Terms

Amortisation Period vs Mortgage Term: The amortisation period is the total time to pay off the mortgage — typically 25 years for insured Canadian mortgages. The mortgage term is how long your current rate is locked in — typically 5 years. At each term renewal, your remaining amortisation period is recalculated based on your current balance and new rate. Making extra payments during the term reduces your remaining amortisation at renewal.
Semi-Annual Compounding: Under Canada's Interest Act, mortgage interest must be calculated using semi-annual compounding — meaning interest is effectively compounded twice per year, not monthly. This makes the true effective monthly rate slightly different from APR ÷ 12. In practice, the difference is small (e.g., at 5.5% APR, the effective monthly rate is 0.4532% instead of 0.4583%), but your lender's official amortisation schedule will reflect semi-annual compounding.
Equity: The portion of your home's value you own — market value minus remaining mortgage balance. Equity builds through principal paydown (from mortgage payments) and appreciation. After 10 years on a $450,000 mortgage at 5.5%, you may have paid down only ~$70,000 through scheduled payments — the rest of each payment was interest. Accelerated payments and extra lump sums build equity faster.
Prepayment Privileges: Most Canadian closed mortgages allow you to make extra payments within defined limits each year — typically 10%–20% of the original mortgage amount — without a prepayment charge. These extra payments go directly to principal, permanently reducing your balance and shortening your amortisation.
Renewal: When your mortgage term ends, you renew at current rates. At renewal, you can choose a new amortisation period (shorter or the same remaining amortisation). If you've made extra payments, your new amortisation will be shorter than the original remaining period. This is also the best time to switch lenders without a prepayment penalty.

Tips for Canadian Borrowers

Extra payments are most powerful early — an extra $300/month in year 1 of a 25-year mortgage saves far more than $300/month in year 15, because it eliminates interest on a larger outstanding balance.
Accelerated bi-weekly payments — paying half your monthly payment every two weeks results in 13 full payments per year instead of 12. This alone can reduce a 25-year Canadian mortgage by 3–4 years and save tens of thousands in interest.
Use your annual prepayment privilege — most Canadian mortgages allow an annual lump sum of 10%–20% of the original balance without penalty. Applying your tax refund, bonus, or savings here is one of the highest guaranteed returns available.
Negotiate at renewal — don't accept your lender's first renewal offer. The posted renewal rate is rarely the best available. Switching lenders at renewal has no prepayment charge, and many lenders cover legal/appraisal costs for transfers.
Shorter amortisation at renewal — if your income has increased since you got your mortgage, choosing a shorter amortisation at renewal (e.g., 20 instead of 25 years remaining) significantly reduces total interest without changing your rate strategy.

Frequently Asked Questions

This is fundamental to how amortisation works. Interest is calculated on the outstanding balance each month. Early in the loan, the balance is at its highest — so the interest charge is also highest. On a $450,000 Canadian mortgage at 5.5%, month 1 interest = $450,000 × (5.5% ÷ 12) ≈ $2,063. The fixed monthly payment means more goes to principal as the balance falls — but the shift is gradual, especially in the first half of a 25-year amortisation.

For CMHC-insured mortgages (down payment under 20%), the maximum amortisation is 25 years — though in August 2024, Canada extended this to 30 years for first-time home buyers and new construction purchases. For uninsured mortgages (down payment 20% or more), lenders can offer up to 30 years (sometimes more for specialized products). Longer amortisation reduces your monthly payment but significantly increases total interest paid over the life of the loan.

Accelerated bi-weekly payments divide your monthly payment in half and collect it every two weeks. Since there are 26 bi-weekly periods per year (not 24), you effectively make 13 monthly payments annually instead of 12. This one extra monthly payment reduces a 25-year Canadian mortgage amortisation by approximately 3–4 years and saves tens of thousands in interest. Most major Canadian lenders offer this option at no extra cost — set it up when you first get the mortgage or at any renewal.

In Canada, breaking a closed mortgage to refinance is expensive — the prepayment charge (typically the greater of 3 months' interest or the Interest Rate Differential) can cost tens of thousands of dollars. This makes mid-term refinancing often uneconomical unless rates have dropped dramatically. A better approach: make extra payments within your prepayment privileges (up to 10%–20%/year without penalty) and then negotiate the best rate at your term renewal, when you can switch lenders freely.

The difference in total interest paid is significant. On a $450,000 CAD mortgage at 5.5%: 25-year amortisation = ~$2,748/month, total interest ≈ $374,000. 20-year = ~$3,090/month, total interest ≈ $293,000 — saving $81,000 in interest at the cost of $342 more per month. If your income supports the higher payment, choosing a 20-year amortisation at the time of purchase or renewal is a powerful long-term financial decision.

The amortisation schedule shows your exact remaining balance at any point in time — which is what you'll be renewing at your next term maturity date. For example, if you're in year 4 of a 5-year term on a $450,000 mortgage, the schedule shows exactly what balance will remain at year 5. This lets you plan: (1) how much to put down at renewal to reduce your renewed balance; (2) what amortisation period to request at renewal; (3) whether to make a large prepayment in year 5 using your annual privilege before the new term begins.

Canada's Interest Act requires that mortgage interest be stated using semi-annual compounding — meaning interest is effectively compounded twice per year (not monthly like in the US or UK). This makes Canadian mortgages slightly cheaper than they would appear if computed with monthly compounding at the same APR. For example, a 5.5% Canadian mortgage has an effective annual rate of approximately 5.576% with semi-annual compounding, vs 5.641% with monthly compounding. The difference is modest but real — your official lender statement will reflect semi-annual compounding.