Canada Mortgage Prepayment Calculator

Paying off your mortgage early in Canada

Enter your balance, rate, amortization and an extra monthly amount to see your new payoff date and interest saved. The balance chart shows the accelerated payoff reaching zero sooner.

Common prepayment privileges

• Lump-sum prepayment: typically 10%–20% of the original balance per year, penalty-free.
• Payment increase: raise your regular payment by a set percentage each year.
• Accelerated bi-weekly: pay half the monthly amount every two weeks — the equivalent of one extra monthly payment a year.

Estimates only and uses monthly compounding as an approximation. Check your mortgage contract for your exact prepayment privileges and any penalties before making a large payment.

Frequently Asked Questions

How do extra payments save money?

Every extra dollar goes straight to principal, so you owe less and are charged less interest each month. That compounds over time, cutting both your total interest and the years remaining.

What are prepayment privileges?

Most closed Canadian mortgages let you prepay a set amount penalty-free each year — commonly 10% to 20% of the original balance as lump sums, plus the option to increase your regular payment by a similar percentage.

Are there penalties for prepaying?

Going over your annual prepayment privilege, or breaking a closed mortgage, can trigger a penalty — usually the greater of three months’ interest or the interest rate differential (IRD). Open mortgages have no prepayment penalty.

How accurate is this estimate?

It uses monthly compounding as a simple approximation. Because Canadian fixed mortgages compound semi-annually, your real interest saved is marginally smaller, but the comparison and trend are accurate.

Should I prepay or invest instead?

Prepaying gives a guaranteed, tax-free return equal to your mortgage rate. Investing may earn more but carries risk. Many people do a mix; consider your rate, risk tolerance and goals.