Amortization Calculator Canada 2025

What Is Mortgage Amortization?

Amortization is the process of paying off your mortgage through regular scheduled payments over a set period. In Canada, the standard amortization period is 25 years, though options range from 5 to 30 years depending on your down payment size and lender.

Each payment splits between principal (the amount borrowed) and interest (cost of borrowing). Early in the mortgage, most of each payment goes to interest. As time passes, more goes to principal. This front-loading of interest makes early prepayments especially powerful.

Canadian Amortization Rules 2025

• Under 20% down (insured mortgage): Maximum 25-year amortization. First-time buyers purchasing new builds may access 30-year amortization.
• 20%+ down (conventional mortgage): Up to 30-year amortization available at most lenders.

Amortization Period vs. Mortgage Term

Amortization period: Total years to fully pay off your mortgage (e.g., 25 years). Mortgage term: Duration of your current contract with a lender (typically 1-5 years). You renew your term multiple times throughout your full amortization.

How Amortization Affects Your Payments

Amortization	Monthly Payment*	Total Interest*	vs 25 Years
15 years	$3,951	$211,200	Save $201,100
20 years	$3,320	$296,800	Save $115,500
25 years	$3,041	$412,300	—
30 years	$2,839	$522,000	Pay $109,700 more

*Based on $500,000 mortgage at 5.5% annual rate, semi-annual compounding.

Strategies to Pay Off Your Mortgage Faster

Accelerated Bi-Weekly Payments

Making 26 bi-weekly payments per year is equivalent to 13 monthly payments instead of 12. This alone can reduce a 25-year amortization to about 22 years and save tens of thousands in interest.

Annual Lump-Sum Prepayments

Most Canadian mortgages allow prepayments of 10-20% of the original balance per year without penalty. Even $5,000/year applied to principal makes a significant dent.

Payment Increases

Most lenders allow you to increase your regular payment amount by 10-20% per year without penalty. Rounding up from $2,941 to $3,200/month adds up quickly over time.

Refinance at a Shorter Amortization

At renewal, consider reducing your remaining amortization from 20 to 17 years if your income supports higher payments. The interest savings can be substantial.

Interest vs. Principal Over Time

On a $500,000 mortgage at 5.5% with 25-year amortization, approximately $412,000 in interest is paid over the full term. In year 1, about 80 cents of every dollar goes to interest. By year 15, the ratio shifts to about 55% principal and 45% interest. Understanding this helps you appreciate why the amortization calculator is such a powerful planning tool.