1. What is Mortgage Acceleration?

Mortgage acceleration is a strategy where homeowners make extra payments toward their mortgage principal, reducing the overall loan term and total interest paid over the life of the mortgage.

2. How Does the Calculator Work?

The calculator uses the mortgage acceleration formula:

Where:

• \( \text{Extra Payments} \) — Additional monthly payment amount in dollars
• \( \text{Original Term} \) — Original mortgage term in months
• \( \text{Mortgage Amount} \) — Total loan amount in dollars
• \( \text{Interest Rate} \) — Annual interest rate as percentage

Explanation: The calculator recalculates the amortization schedule with the increased monthly payment to determine how much the mortgage term can be reduced.

3. Benefits of Mortgage Acceleration

Details: Accelerating your mortgage payments can save thousands of dollars in interest and help you become mortgage-free years earlier, providing financial freedom and equity building.

4. Using the Calculator

Tips: Enter your current mortgage details including the original term, mortgage amount, and interest rate. Then input how much extra you can pay each month to see how much time you can save on your mortgage.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save by making extra payments?
A: Even small extra payments can significantly reduce your mortgage term and total interest paid. For example, an extra $100/month on a typical mortgage can reduce the term by several years.

Q2: Are there penalties for paying off a mortgage early in Canada?
A: Most Canadian mortgages allow prepayments of 10-20% of the original principal annually without penalty. Check your mortgage agreement for specific terms.

Q3: Should I invest or pay down my mortgage faster?
A: This depends on your mortgage interest rate vs. expected investment returns, risk tolerance, and financial goals. Generally, if your mortgage rate is high, paying it down may be better.

Q4: What's the difference between accelerated bi-weekly and monthly?
A: Accelerated bi-weekly payments result in one extra monthly payment per year, significantly reducing your mortgage term compared to regular monthly payments.

Q5: Can I change my payment frequency?
A: Most lenders allow you to switch to accelerated payments, but check with your specific lender about any fees or restrictions.