What is a mortgage amortization schedule?

An amortization schedule shows every mortgage payment over the life of the loan, breaking down how much goes to principal vs interest each month and showing the remaining balance after each payment.

Why does so much go to interest at the start?

Interest is calculated on the outstanding balance. At the start, you owe the most, so interest charges are highest. As you pay down principal, less interest accrues and more payment goes to principal.

How do extra payments affect amortization?

Extra payments go directly to principal, reducing the balance faster. This means less interest over the life of the loan and a shorter amortization period.

What is the difference between amortization and mortgage term?

Amortization is the total time to pay off the mortgage (typically 25 or 30 years in Canada). The mortgage term is the length of your current rate contract (usually 1–5 years). At the end of each term, you renew at a new rate. The amortization continues across multiple terms until the mortgage is fully paid.

Should I choose 25 or 30 year amortization in Canada?

A 25-year amortization has higher monthly payments but saves tens of thousands in interest. A 30-year amortization lowers your monthly payment by about 10–12% but costs significantly more in total interest. For a $500,000 mortgage at 5%, the difference is roughly $60,000–$80,000 more interest over the life of the loan. Most insured mortgages (under 20% down) are limited to 25 years.

Mortgage Amortization Schedule Canada 2026: Calculator & Payment Breakdown

Mortgage Amortization Calculator

Mortgage Amount

Interest Rate

Amortization Period (Years)

Payment Frequency

Payment Amount$3,052

Total Payments$915,600

Total Interest$415,600

Interest Ratio83%

Amortization Schedule (First 5 Years)

Year	Principal Paid	Interest Paid	Remaining Balance

Sample Amortization Schedule

$500,000 Mortgage at 5.5% over 25 Years (Monthly)

Year	Principal Paid	Interest Paid	Balance	Cumulative Interest
1	$9,680	$26,944	$490,320	$26,944
2	$10,228	$26,396	$480,092	$53,340
3	$10,807	$25,817	$469,285	$79,157
4	$11,418	$25,206	$457,867	$104,363
5	$12,064	$24,560	$445,803	$128,923
10	$15,540	$21,084	$377,058	$243,683
15	$20,022	$16,602	$285,115	$333,220
20	$25,797	$10,827	$164,022	$393,197
25	$33,233	$3,391	$0	$415,580

Key insight: In year 1, 74% of payments go to interest. By year 25, only 9% goes to interest.

How Amortization Works

Principal vs Interest Over Time

Phase	Years	Principal %	Interest %
Early	1-5	26-33%	67-74%
Middle	10-15	42-55%	45-58%
Late	20-25	75-91%	9-25%

Why Interest Decreases

Factor	Explanation
Interest calculated on balance	Lower balance = less interest
Payment stays fixed	Less interest = more to principal
Snowball effect	Principal reduction accelerates

Impact of Interest Rate on Amortization

$500,000 Mortgage, 25-Year Amortization

Interest Rate	Monthly Payment	Total Interest	% of Principal
4.0%	$2,634	$290,181	58%
5.0%	$2,908	$372,400	74%
5.5%	$3,052	$415,600	83%
6.0%	$3,200	$459,955	92%
6.5%	$3,352	$505,450	101%
7.0%	$3,509	$552,700	111%

At 7%, you pay more in interest than the original loan amount!

Impact of Amortization Period

$500,000 Mortgage at 5.5%

Amortization	Payment	Total Interest	Interest Savings
30 years	$2,839	$522,040	—
25 years	$3,052	$415,600	$106,440
20 years	$3,437	$324,880	$197,160
15 years	$4,089	$236,020	$286,020

Shorter amortization = higher payments but massive interest savings.

Accelerating Your Amortization

Strategy 1: Increase Payment Frequency

Frequency	Payments/Year	Annual Total	Interest Saved (25yr, $500k)
Monthly	12	$36,624	—
Bi-weekly	26	$39,520	$45,000
Accelerated bi-weekly	26	$39,676	$52,000
Weekly	52	$39,572	$48,000

Accelerated bi-weekly: Take monthly payment ÷ 2, pay 26 times = 13 monthly payments/year.

Strategy 2: Lump Sum Payments

Lump Sum	When	Interest Saved	Years Saved
$10,000	Year 1	$18,500	1.1 years
$10,000	Year 5	$14,200	0.9 years
$10,000	Year 10	$9,800	0.6 years
$25,000	Year 1	$46,200	2.8 years

Earlier lump sums save more because they compound longer.

Strategy 3: Increase Monthly Payment

Extra Amount	Interest Saved	Years Saved
$100/month	$42,000	2.5 years
$200/month	$73,000	4.5 years
$500/month	$131,000	8 years

Even $100/month makes a significant difference.

Payment Breakdown Visualization

Year 1 Monthly Payment: $3,052

Component	Amount	%
Interest	$2,292	75%
Principal	$760	25%

Year 25 Monthly Payment: $3,052

Component	Amount	%
Interest	$282	9%
Principal	$2,770	91%

Using Prepayment Privileges

Most mortgages allow extra payments:

Privilege	Typical Limit	Example
Lump sum	15-20% of original principal	$75,000-100,000 annually
Payment increase	15-20%	$3,052 → $3,662
Double-up	100% of regular payment	$3,052 extra occasionally

Use these to accelerate your amortization without penalty.

Renewal Considerations

At each renewal (typically every 5 years):

Option	Impact on Amortization
Keep same amortization	Original payoff date maintained
Extend amortization	Lower payments, more interest
Shorten amortization	Higher payments, less interest
Re-amortize for 25 years	Reset, lose progress

Tip: At renewal, consider maintaining the same payment even if rates drop. This accelerates payoff.