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Notice that all fix-rate mortgages in Canada are compounded semi-annually. Do NOT use this calculator for other general-purpose loans or mortgages. Instead, please use the loan calculator or its advanced version. | |||||||||||
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Accelerated Mortgage Payments
Normally, when you calculate a fix-term mortgage with any payment schedule, be it monthly, bi-weekly, or weekly, the goal is to pay off the loan at the end of the term. The more frequent you pay, the less interest will accrue, and you save money on the interest. Take a 15-year, $200,000 loan with an interest rate of 7.5% for example:
| Each Payment | Total Payments | Total Interest | |
| Monthly | $1,841.03 | $331,384.92 | $131,384.92 |
| Bi-Weekly | $848.30 | $330,837.55 | $130,837.55 |
The accelerated bi-weekly payment is, take the monthly payment above (as if you were to pay off the loan in 15 years) and divide it by 2, enforcing a fictitious 28-day month.
Accelerated Bi-Weekly Payment = Monthly Payment ÷ 2 = $920.51
Notice that this amount ($920.51) is significantly higher than the normal bi-weekly payment ($848.30), resulting in the loan being paid off much earlier than the original term of 15 years, therefore the acceleration.
| Each Payment | Total Payments | Payoff Time | |
| Bi-Weekly | $848.30 | $330,837.55 | 15 years |
| Accelerated Bi-Weekly | $920.51 | $311,242.27 | 13 years |
Accelerated weekly is essentially the same as accelerated bi-weekly, except that the payment amount is calculated by dividing the monthly payment by 4, instead of 2.
