1. What is Mortgage Accelerated Payment?

Accelerated mortgage payments allow Canadian homeowners to make additional payments beyond their regular mortgage installments, reducing the principal faster and saving significant interest costs over the loan term.

2. How Does the Calculator Work?

The calculator uses financial formulas to determine:

Where:

• \( Mortgage\ Amount \) — Total loan amount in dollars
• \( Interest\ Rate \) — Annual interest rate percentage
• \( Amortization\ Period \) — Original loan term in years
• \( Extra\ Monthly\ Payment \) — Additional payment amount

Explanation: The calculator compares standard amortization with accelerated payments to determine time and interest savings.

3. Benefits of Accelerated Payments in Canada

Details: Accelerated payments can save thousands in interest, build equity faster, and provide financial flexibility. In Canada, most mortgages allow annual prepayment privileges.

4. Using the Calculator

Tips: Enter your mortgage details including the extra payment amount you plan to make. All values must be positive numbers within reasonable ranges.

5. Frequently Asked Questions (FAQ)

Q1: What are typical prepayment privileges in Canada?
A: Most Canadian mortgages allow 10-20% annual prepayment of the original principal, plus payment increases.

Q2: How much can accelerated payments save?
A: Even small extra payments can save thousands and reduce amortization by several years.

Q3: Are there penalties for extra payments?
A: Most fixed-rate mortgages have prepayment limits; exceeding them may incur penalties. Variable rates often have more flexibility.

Q4: Should I invest or make extra mortgage payments?
A: Depends on your mortgage rate vs. expected investment returns and risk tolerance.

Q5: Can I change my payment frequency?
A: Accelerated bi-weekly payments can further reduce amortization time and interest costs.