⚡ Pay It Off Faster

Mortgage Prepayment Calculator Canada 2025

Find out exactly how much interest you save and how many years you shave off by making extra payments on your Canadian mortgage.

How much can prepayments really save you?

A $500/month extra payment on a $400,000 mortgage at 5.5% saves $80,000+ in interest and shaves 7 years off your amortization. That's the power of prepayments — and it compounds the earlier you start. Enter your numbers below to see your exact impact.

Your Mortgage
Remaining Balance
$0
$
Annual Rate
5.50%
Remaining Years
20 yrs
Extra Monthly Payment
$0
$
Annual Lump Sum
$0
$
Interest Saved
$0
Time Saved
0 yrs
New Payoff
–
Without Extra
$0
With Extra
$0
Balance comparison: regular vs accelerated payments

📅 Prepayment Privileges

Most Canadian lenders allow 10–20% annual lump-sum payments without penalty. Check your mortgage contract for your specific limits — typically on your anniversary date.

⚠️ Prepayment Penalties

Breaking your mortgage early to refinance can cost 3 months' interest or the Interest Rate Differential (IRD) — whichever is greater. This can be tens of thousands of dollars.

📆 Accelerated Bi-Weekly

Switching to accelerated bi-weekly payments is the simplest prepayment strategy — it's equivalent to making one extra monthly payment per year with no lifestyle change required.

Frequently asked questions

The savings can be substantial. On a $500,000 mortgage at 5%, adding just $200/month to your payment saves approximately $40,000 in interest and cuts 3+ years off your amortization. The earlier in your mortgage term you start, the more you save, since interest costs are front-loaded.

Most Canadian mortgage contracts allow you to prepay a percentage of the original principal each year without penalty — typically 10–20% of the original mortgage amount. You can usually also increase your regular payment by 10–20%. Exceeding these limits triggers a prepayment penalty. Check your mortgage contract or call your lender for your specific limits.

For fixed-rate mortgages, the penalty is the greater of 3 months' interest or the Interest Rate Differential (IRD) — which can reach $20,000–$40,000+ if rates have fallen since you signed. For variable-rate mortgages, the penalty is typically just 3 months of interest, which is far smaller.

Both reduce interest and amortization, but lump-sum payments tend to have the greatest impact when made early in the mortgage. Increasing regular payments is easier to sustain consistently. Many Canadians do both: increase monthly payments at renewal and use any annual bonuses or tax refunds as lump-sum prepayments.

Yes — accelerated bi-weekly payments result in one extra full monthly payment per year (26 payments × half your monthly payment = 13 monthly equivalents instead of 12). On a $500,000 mortgage at 5%, switching to accelerated bi-weekly saves approximately $35,000 in interest and reduces amortization by about 3 years.