Mortgage Payoff Chart
How much interest can you save by increasing your mortgage payment or making extra prepayments? This financial calculator helps you find out. The chart plots the mortgage balance and the cumulative interest over the full amortization period.
You can select from a variety of accelerated payment and prepayment options. Note the list of Definitions below the chart area. If you enter a non-zero "Prepayment amount", the chart shows additional graphs for the balance and cumulative interest with prepayments. These graphs enable you to see how much the prepayments reduce the cumulative interest costs and the time required to pay off the loan.
After entering new data, press the "Enter" key on your keyboard (or click on the "Calculate" button below the chart) to generate the new Mortgage Payoff Chart. Click on the "View Report" button to open a table summarizing each year's payments (with and without prepayments).
Definitions
| Original mortgage amount: | The original amount financed with your mortgage, not to be confused with the remaining balance or principal balance. |
| Interest rate: | Annual interest rate. Maximum interest rate is 20%. All Canadian mortgages use semi-annual compounding of interest. |
| Mortgage amortization (years): | Total length of your original mortgage in years. Most common lengths are 20 years and 25 years. |
| 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 the accelerated weekly payments you are in effect paying an additional monthly payment per year. |
| Number of years remaining: | This is the total number of years remaining in the amortization period when the prepayments begin. The earlier you begin prepayments, the more interest you can save. |
| Prepayment freq: | This is the frequency of the "Prepayment amount". If you are making a single prepayment amount, select "one time" in the drop-down list. |
| Prepayment amount: | This is the amount of the single or regular prepayment(s). It will go entirely to reduction of principal. |