Mortgage amount

The total amount for this mortgage.

Interest rate

The interest rate on this mortgage.

Mortgage amortization

The number of years over which you will repay this mortgage. The most common amortization for mortgages are 20 years and 25 years.

Fees

Any fees that should be included in the APR calculation. These fees can vary by lender, but at a minimum usually includes prepaid interest.

Mortgage payment

Monthly principal and interest payment (PI) using semi-annual compounding.

Equivalent monthly payment

The sum of periodic payments for a year divided by 12 months.

Accelerated weekly and bi-weekly payments

Accelerated weekly and accelerated bi-weekly payment options are calculated by taking a monthly payment schedule and assuming only four weeks in a month. We calculate an accelerated weekly payment, for example, by taking your normal monthly payment and dividing it by four. Since you pay 52 weekly payments, by the end of a year you have paid the equivalent of one extra monthly payment. This additional amount accelerates your loan payoff by going directly against your loan's principal. The effect can save you thousands in interest and take years off of your mortgage.

The accelerated bi-weekly payment is calculated by dividing your monthly payment by two. You then make 26 bi-weekly payments. Just like the accelerated weekly payments you are in effect paying an additional monthly payment per year.

Annual percentage rate (APR)

A standard calculation used by lenders. It is designed to help borrowers compare different loan options. For example, a loan with a lower stated interest rate may be a bad value if its fees are too high. Likewise, a loan with a higher stated rate with very low fees could be an exceptional value. APR calculations incorporate these fees into a single rate. You can then compare loans with different fees, rates or different amortizations. It is important to note that the APR calculation for mortgages can be less than the stated rate. This is due to the way interest is compounded in Canada. All mortgages calculated with this calculator use semi-annual compounding which produces a lower APR than a mortgage compounded more frequently such as monthly, or weekly.