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Canada Prepayment Simulator

See exactly how extra lump-sum payments reduce your mortgage payoff date and how much interest you save over the life of your loan.

Loan Details

CAD
CAD 100,000CAD 3,000,000
CAD
CAD 32,500CAD 650,000
%
0.5%15%
yrs
5 yrs30 yrs

Used for CMHC insurance tax (QC: 9.975% QST, SK: 6% PST)

Prepayment

CAD
CAD 0CAD 520,000
Most Canadian lenders allow 10–20% of your original mortgage balance as prepayment privileges each year without penalty. Check your specific mortgage agreement for exact limits.

Balance Comparison

Over 25 years
Without Prepayment
With Prepayment

Impact Summary

Interest Saved

CAD 92,175

Total prepayments: CAD 100,000

Years Saved

5.3 yrs

Payoff Without Prepay

August 2051

Payoff With Prepay

August 2045

Total Cost Without Prepay

CAD 897,560

Total Cost With Prepay

CAD 806,080

Monthly Payment

CAD 2,992

PilotRate provides educational mortgage estimates and does not constitute financial advice.

Canada Prepayment — Frequently Asked Questions

What is the prepayment privilege on Canadian mortgages?
Most Canadian lenders allow you to prepay 10% to 20% of your original mortgage balance each year without penalty. This can be done through lump-sum payments or by increasing your regular payment amount. Our prepayment calculator shows exactly how these options reduce your amortization and save you interest.
How much can I save by making extra mortgage payments in Canada?
Even small extra payments make a significant difference over time. For example, adding $200 per month to a $400,000 mortgage at 5% can save over $50,000 in interest and shorten your amortization by several years. Our simulator shows the exact savings for your specific loan amount and rate.
Does prepaying reduce my monthly payment or shorten my mortgage term?
Lump-sum prepayments and increased regular payments both reduce your principal balance, which shortens your amortization period and reduces total interest. Generally your regular payment amount stays the same unless you formally renegotiate with your lender. Our calculator shows the impact on both term length and total interest.
What are the prepayment limits for Canadian mortgages?
Typical Canadian mortgages include a prepayment privilege of 10% to 20% of the original principal per year. Some lenders allow up to 100% prepayment on variable-rate or open mortgages. Any prepayments beyond your privilege limit may incur a penalty equal to three months of interest or the interest rate differential.
Is it better to make lump-sum payments or increase monthly payments?
Lump-sum payments are effective if you receive irregular income like bonuses or tax refunds. Increasing your regular monthly payment works well for consistent cash flow. Both strategies reduce your principal and save interest. Many Canadians use a combination of both to maximize their prepayment privileges.