Extra Payment Savings

Every dollar you add to a mortgage payment goes straight to principal, and every dollar of principal removed early stops accruing interest for every month remaining on the loan. That compounding is why a modest extra payment, kept up for years, saves far more than it costs. This calculator runs your own balance, rate and amortization through the real numbers: interest saved, and the payoff date pulled forward.

What it answers

How much total interest an extra monthly payment saves over the life of the loan.
How many years and months it shaves off your amortization.
Your original and new payoff dates, side by side, if you enter a mortgage start date.

What it doesn't cover

It does not check your prepayment privilege. Most Canadian mortgages let you raise your regular payment by 10% to 20% a year without penalty, but the exact limit is set by your contract, not by this calculator. Confirm yours before committing to a higher payment. It also holds your rate flat for the whole amortization, which real life won't do. You'll renew at whatever rate is on offer every few years, so treat the dollar figure as an illustration of the mechanism, not a guaranteed number a decade out.

Every input, explained

Mortgage amount. Your current balance, not what you originally borrowed. Check a recent statement or your lender's online portal.

Interest rate. Your current contract rate. Canadian mortgages compound semi-annually by law, so this calculator uses the same rate conversion as the Mortgage Payment calculator, not a simple rate-divided-by-twelve shortcut.

Amortization. The years left on your current schedule, not the original term length.

Extra payment per month. The additional amount you'd add to every regular payment, starting with your next one and held flat going forward.

How the math works

The calculator first computes your regular payment the standard way, then adds your extra amount to get a new, larger fixed payment. It walks that new payment forward one month at a time: each month's interest is charged on the remaining balance, and everything left over comes off principal, exactly like a normal amortization schedule, until the balance reaches zero. The month that happens is your new payoff point. Interest saved is simply the standard schedule's total interest minus the new schedule's total interest.

Worked example

A $500,000 mortgage at 4.49%, 25-year amortization, with an extra $300 a month:

Regular payment: $2,765 a month. New payment with the extra: $3,065.
Standard payoff: 25 years. With the extra $300: 20 years, 11 months, about 4 years and 1 month sooner.
Standard total interest: $329,376. With the extra $300: $268,947.
Interest saved: $60,428, against $75,300 paid in extra out of pocket over the shortened loan.

When it's not the right move

If you're carrying credit-card or car-loan debt at a higher rate, that debt costs you more per dollar than your mortgage does, so pay it down first. If your emergency fund is thin, keep the extra liquid instead of locking it into the house. A lump-sum prepayment near your mortgage's anniversary date can do the same job later, and it's easier to skip in a year when cash is tight than an extra payment you've already committed to monthly.

Frequently asked questions

How much does an extra $200 a month really save?

It depends on your balance, rate and how many years are left, but on a typical $500,000 mortgage at 4.49% over 25 years, an extra $200 a month saves roughly $42,000 in interest and pays the loan off about 2 years and 10 months early. Enter your own numbers above for your exact figures.

Does paying extra reduce my payment or my amortization?

Your regular payment stays the same size; the extra amount is added on top of it every month. That larger combined payment goes straight to principal, which shortens the amortization instead of lowering the payment.

Is there a penalty for paying more than my regular payment?

Most Canadian mortgages include a prepayment privilege that lets you raise your regular payment by a set percentage each year, commonly 10% to 20%, with no penalty. Above that privilege, extra amounts usually count as a lump-sum prepayment with its own separate annual limit. Check your mortgage contract or ask your lender before increasing your payment.

What is the difference between this and accelerated biweekly?

Both add roughly one extra monthly payment a year, so the interest saved and years shaved off land in the same range. This calculator handles the extra amount as a flat monthly top-up, which is simpler to enter if your paycheque is monthly. If you're paid biweekly and want the schedule to match, see the accelerated biweekly payments guide instead.

Rules and rates as of September 2026. This is general information for Canadian home buyers and sellers, not financial, legal, or tax advice. Rules and rates change; confirm current figures with your lawyer or notary, your lender, or the government office that administers the tax before relying on them.