Mortgage Prepayment Calculator

Find out how much sooner you could be mortgage-free, and how much interest you would save, with extra payments or a yearly lump sum.

How prepayments save interest

Every dollar of prepayment goes straight to the balance, so all future interest is charged on a smaller amount. Because mortgage interest compounds over decades, even modest extra payments early in the amortization cut years off the mortgage.

Check your prepayment privileges

Most closed mortgages allow some prepayment each year without a penalty, often a lump sum of 10% to 20% of the original balance and a payment increase of a similar percentage. Going over the limit usually triggers a prepayment charge. Your mortgage contract lists the exact privileges and whether unused amounts carry forward.

At the end of your term (on the renewal date) you can usually pay down any amount without a penalty. That makes renewal a good moment for a larger lump sum.

Worked example

On a $423,190 balance at 4.29% with 20 years left and monthly payments, adding $100 a month and a $5,000 lump sum each year pays the mortgage off about 4 years and 6 months early and saves about $50,400 in interest. The calculator shows a year-by-year balance for your own numbers.

Frequently asked questions

Is it better to prepay or invest?

Prepaying earns a guaranteed return equal to your mortgage rate. Compare that with what you expect to earn after tax, for example in a TFSA or RRSP, and keep an emergency fund first.

Should I switch to accelerated payments?

Accelerated bi-weekly payments add the equivalent of one extra monthly payment each year. Choose it in the payment frequency menu to see the effect, or compare frequencies in the mortgage payment calculator.

Reviewed October 2026 · How we build our calculators · Report an issue