Mortgage prepayment calculator
Your rate isn't the only thing that matters. See how much accelerated payments, payment increases and double-ups save, and whether a lower rate or better prepayment privileges comes out ahead.
Your payoff plan will appear here
Enter a mortgage amount, an interest rate (0–30%) and an amortization of 1–50 years.
Your payment
Ahead of schedule$0 every 2 weeks
Never pays off
This payment doesn't cover the interest, so the balance never reaches zero.
- Total interest
- $0
- Mortgage-free in
- –
- Contract monthly payment
- $0
- Interest saved
- $0
- Time saved
- –
Where the savings come from
How this is calculated Hide details
Savings are measured against paying the contract monthly payment for the full amortization. Each option in the breakdown is credited with the interest it removes on top of the ones before it, so they add up to the total. Assumes the same rate for the whole amortization and prepayments from day one. Estimate, not financial advice.
Last updated: October 13, 2026
Compare two lenders: rate vs privileges
Enter each lender's rate and prepayment privileges. Uses the mortgage amount, amortization and compounding from the calculator above. "Maximum" means using every privilege in full: accelerated bi-weekly (if allowed), the full payment increase, and doubling up the increased payment (if allowed).
Enter a valid mortgage above and a rate for each lender to compare.
| Scenario | Payment | Total interest | Mortgage-free in |
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What prepayment privileges are
Prepayment privileges are the extra payments your lender allows each year without charging a penalty. Every extra dollar goes straight to principal, so it stops costing you interest for the rest of the mortgage. In Canada they usually come in three forms:
Payment increase. Raise your regular payment by up to a set percentage, commonly 10% to 20%, sometimes up to 100% of the original payment.
Double-up. Make an extra payment on top of a regular one, as often as every payment date at some lenders.
Lump sum. Pay down up to a percentage of the original balance (often 10% to 20%) once a year. Lump sums aren't modelled here because they depend on when and how much you can put down.
Elsewhere the idea is the same under different names: UK fixed-rate deals often allow overpayments of around 10% of the balance a year before early repayment charges apply, Australian variable loans usually allow unlimited extra repayments while fixed loans often cap them, and most US mortgages can be prepaid freely. The limits are in your mortgage documents, and they differ far more between lenders than rates do.
Accelerated vs regular bi-weekly
Regular bi-weekly takes your monthly payment × 12 and splits it over 26 payments. You pay the same amount each year, just more often. The saving is tiny: about $1,520 over 25 years on a $500,000 mortgage at 4.5%.
Accelerated bi-weekly pays half your monthly payment every two weeks. With 26 bi-weekly periods a year, that's 13 monthly payments instead of 12. That's one extra payment a year, all of it going to principal. On the same mortgage ($2,767.36 a month, or $1,383.68 every two weeks), it saves about $50,078 in interest and 3 years 4 months of payments.
Accelerated weekly works the same way: a quarter of the monthly payment every week, which also adds up to 13 monthly payments a year.
Same cash, lower rate wins. Privileges are a ceiling
If you'd pay the same amount every month with either lender, the lower rate always comes out ahead: less of each payment goes to interest, so more goes to principal.
Privileges don't lower your cost by themselves. They set the ceiling on how fast you're allowed to pay the mortgage down. A lender with a slightly higher rate but generous privileges only wins if you'll actually use those privileges, and keep using them, year after year.
So the honest question isn't "which rate is lower?" but "how much will I realistically pay each month?" If the answer is "just the minimum", take the lower rate. If you expect to prepay heavily, check that the lender will let you.
Why it matters for financial independence
For most households, the mortgage payment is the biggest line in the budget. Paying it off years earlier lowers the income you need in retirement, which can bring your financial independence number down a lot.
Prepaying earns a guaranteed, tax-free return equal to your mortgage rate. Whether that beats investing depends on your rate, your expected returns, your TFSA and RRSP room, and how much you value flexibility, since prepaid money is hard to get back out. Either way, knowing what your privileges are worth lets you choose on purpose rather than by default.
Assumptions
- The same interest rate for the full amortization. Real mortgages renew every few years (usually every five in Canada) at whatever rate is available then.
- Prepayments start on day one and continue every period until the mortgage is paid off.
- Savings are measured against paying the contract monthly payment for the full amortization.
- Lump-sum prepayments, fees, mortgage insurance premiums and penalties for breaking the mortgage are not included.
- Check your lender's actual terms: privilege limits, whether they reset each year, and the penalty for going over.
This tool is informational only and is not financial advice. Figures are estimates; your lender's statement is the authority on your mortgage.
Mortgage prepayment FAQ
What are mortgage prepayment privileges?
Prepayment privileges are the extra payments your lender lets you make each year without a penalty. The common ones in Canada are increasing your regular payment by up to a set percentage (often 10% to 20%, sometimes 100%), doubling up a payment, and making a lump-sum payment of up to a percentage of the original balance once a year. Every dollar of prepayment goes straight to principal, which cuts the interest charged for the rest of the mortgage. The exact limits are in your mortgage commitment and vary a lot between lenders.
What is the difference between bi-weekly and accelerated bi-weekly payments?
Regular bi-weekly takes your monthly payment × 12 and spreads it over 26 payments, so you pay the same amount per year. It saves almost nothing (about $1,520 over 25 years on a $500,000 mortgage at 4.5%). Accelerated bi-weekly pays half your monthly payment every two weeks. Because there are 26 bi-weekly periods in a year, that adds up to 13 monthly payments instead of 12. On the same mortgage, that extra payment a year saves about $50,078 in interest and 3 years 4 months of payments.
Is a lower mortgage rate always better than better prepayment privileges?
If you pay the same amount either way, the lower rate always wins, because less of each payment goes to interest. Privileges only matter if you actually use them: they set the ceiling on how fast you are allowed to pay the mortgage down. A slightly higher rate with generous privileges can come out far ahead, but only if you have the cash flow to make those extra payments year after year. Use the lender comparison above with your own numbers to see where the line is for you.
How much does a double-up payment save?
A double-up lets you make an extra regular payment alongside your normal one. Doubling every monthly payment on a $500,000, 25-year mortgage at 4.5% would save about $219,897 in interest and have it paid off in 9 years 3 months. Most people double up occasionally rather than every time. Any extra payment helps, and earlier ones help most because they cut interest for longer.
Why does the calculator default to semi-annual compounding?
Canadian fixed-rate mortgages are compounded semi-annually, which makes the effective rate slightly lower than the same rate compounded monthly. Mortgages in the US, UK and Australia (and some Canadian variable-rate mortgages) are usually compounded monthly, so switch the compounding option if that applies to you. Your mortgage commitment states which one your lender uses.
Does this include lump-sum prepayments?
No. This calculator models payment increases, double-ups and accelerated payment schedules, which are all regular, ongoing prepayments. Annual lump sums depend on when and how much you pay each year, so they are not included. A lump sum early in the mortgage saves more interest than the same amount later.
Should I prepay my mortgage or invest the money instead?
It depends on your rate, your expected after-tax investment return, your tax-advantaged room (TFSA, RRSP, FHSA in Canada), how much you value a guaranteed return, and how much flexibility you need, since money prepaid into a mortgage is hard to get back out. Prepaying earns a guaranteed return equal to your mortgage rate. This calculator shows what prepaying saves; it is not financial advice on which choice is right for you.
Is my information private?
Yes. Every calculation runs in your browser. Nothing you enter is sent to a server, stored, or tracked. Close the tab and it is gone.
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