How is amortization calculated in Canada?

Using the standard amortization formula, but with the periodic interest rate derived according to the loan type. Canadian mortgages use semi annual compounding, so the monthly rate is (1 + r/2)^(1/6) 1 rather than r ÷ 12. Most other loans auto, personal, student compound monthly.

Why do Canadian mortgages compound semi annually?

It's the long standing Canadian convention, tied to the disclosure requirements of the Interest Act for mortgages on real property. It means the effective annual rate is slightly higher than the quoted nominal rate 5% nominal is 5.0625% effective but the monthly periodic rate used in payment calculations is slightly lower than simple division would give.

What's the difference between term and amortization?

Amortization is the total time to pay the loan to zero, commonly 25 years in Canada. Term is the length of your current interest rate contract, typically 3 to 5 years. At the end of each term you renew at prevailing rates, so a 25 year schedule assumes a rate that will actually reset several times.

Does making biweekly payments actually save money?

Only accelerated biweekly does. Regular biweekly divides your annual payment total across 26 payments same amount per year, no time saved. Accelerated biweekly is half your monthly payment paid 26 times, which equals 13 monthly payments a year instead of 12. That extra payment is what shortens the amortization.

How much of my payment goes to principal?

Very little at first. On a $500,000 mortgage at 5% over 25 years, the first payment of about $2,908 splits into roughly $2,062 interest and $846 principal about 71% interest. The ratio inverts gradually over the amortization.

Why doesn't my schedule match my bank's?

Usually the compounding convention, especially if you used a US calculator. Other causes include daily versus monthly interest calculation, rounding, fees rolled into the balance such as mortgage insurance premiums, or a rate change since the loan started.

Is it better to shorten the amortization or make extra payments?

They achieve a similar result with different flexibility. A shorter amortization commits you to a higher payment permanently. Extra payments and accelerated frequencies achieve much of the same saving while letting you pause in a difficult year. Most Canadian mortgages allow prepayments of 15 to 20% of the original principal annually without penalty.

When is a prepayment worth the most?

As early as possible. A dollar of principal removed in year 2 eliminates over two decades of compounding on that dollar; the same dollar in year 20 eliminates five years. The saving from an identical prepayment falls steadily over the life of the loan.

Can I download the amortization schedule?

Yes, as CSV or Excel, free and without providing an email address. The export includes every payment with interest, principal, cumulative interest and remaining balance.

Is this calculator free?

Yes. No account, no email, no limits and no mortgage broker will call you.

Amortization Calculator Canada

See exactly where every payment goes how much to interest, how much to principal, and what you still owe after each one.

Works for any amortising loan, with the right compounding convention applied automatically. Canadian mortgages compound semi annually; most other loans don't, and using the wrong one is why schedules often don't match the lender's.

Amortization Calculator

Loan Principal Amount ($)

Interest Rate (%)

Amortization

Compounding Type

Payment Frequency

Regular Payment Amount

$2,682

/ month

Total Interest: $354,489 · Total Principal + Interest: $804,489

Original Principal

$450,000

Initial borrowed balance

Total Interest Paid

$354,489

79% of principal

Amortization

25 Years

300 total payments

Principal vs Interest Amortization CurveBalance over time

Calculated using standard Bank of Canada semi-annual compounding regulations for Canadian mortgages and loans.

What an Amortization Schedule Shows

An amortization schedule breaks a loan into every individual payment. On a $500,000 mortgage at 5% over 25 years ($2,908 monthly payment), the very first payment splits into $2,062 interest and $846 principal (71% interest).

How Canadian Compounding Works

Mortgages (Semi Annual)

Canadian mortgages compound semi annually by law: Periodic monthly rate = (1 + r/2)^(1/6) 1. At 5% nominal, the monthly rate is 0.4124167% (effective 5.0625%).

Other Loans (Monthly)

Auto loans, personal loans, and student loans compound monthly: Periodic rate = annual rate ÷ 12 (0.4166667% at 5%).

Payment Frequency Regular vs Accelerated

Frequency	How calculated	Annual Total	Time Saved
Monthly	Standard	$6,979.20	None
Regular Biweekly	(Monthly × 12) ÷ 26	$6,979.20	None
Accelerated Biweekly	Monthly ÷ 2 (paid 26×)	$7,560.80	Years saved

Why Use the CalcVault Amortization Calculator

Semi Annual Mortgages MathApplies exact Canadian Interest Act semi annual compounding.

Accelerated Frequency EngineCompares monthly vs regular biweekly vs accelerated biweekly payoff speed.

Free Schedule ExportDownload full payment schedule as Excel or CSV without email.

100% FreeNo ads, no broker calls, no signup required.

Related Calculators

Live

CPI Inflation Calculator Canada

Calculate purchasing power changes and historical CPI inflation in Canada from 1914 to present.

Open tool

Live

RESP Calculator Canada

Calculate Canadian RESP growth, CESG government grants, CLB, and university savings.

Open tool

Live

Child Benefit Calculator

Calculate your estimated tax free monthly Canada Child Benefit (CCB) payout.

Open tool

Amortization FAQs

Sources and Assumptions

Sources: Interest Act of Canada (mortgage compounding requirements), Financial Consumer Agency of Canada (FCAC).

Disclaimer: CalcVault is not a lender or mortgage broker. This tool provides calculation estimates for educational purposes.