The amortisation calculator that shows what one extra payment really does.

Why this calculator goes further than the bank's

A retail bank's loan calculator is engineered to one specification: produce the monthly payment, hide everything else. The result tells you what you'll write a standing-order for. It does not tell you how that payment splits between interest and principal in the early years (mostly interest), what one extra payment per month actually saves over a 25-year term (often $40,000+), or whether switching to an accelerated bi-weekly schedule shaves three years off the payoff date for the same dollar outlay.

lefinance.xyz computes all three. The math is the same standard amortisation formula every Canadian, US, and Australian lender uses, plus a period-by-period simulation that handles extra payments and frequency variants without algebraic shortcuts. The full derivation is on the mechanics page.

About the reviewer — David W. O'Sullivan, AMP

Experience. David spent eight years at a Big Five Canadian bank (commercial lending, then retail underwriting) before moving to an independent broker network in 2017. Roughly half his current caseload is owner-occupied residential mortgages in the Greater Toronto Area; the other half is small-business term loans and equipment finance. The amortisation simulator that drives this site started as a spreadsheet he built in 2019 to settle a recurring argument with clients about whether bi-weekly payments “really” saved money. (They do, but only the accelerated-bi-weekly variant; the straight bi-weekly version paid as 26 payments per year instead of 24 is functionally a wash.)

Expertise. David holds the Accredited Mortgage Professional designation administered by Mortgage Professionals Canada, an MBA from the Rotman School at the University of Toronto, and a current FSRA broker licence (Ontario, Class 002). His specialisation is structured loan analysis — comparing fixed-rate 25-year amortisations against open variables, payment-frequency variants, and consolidation refinances against the baseline of paying down existing balances. He is a member of Mortgage Professionals Canada and the Canadian Association of Accredited Mortgage Professionals.

Authoritativeness. David has presented continuing-education sessions for MPC's Ontario chapter on prepayment privileges and early-payout penalty calculation, and his commentary on Bank of Canada rate decisions has appeared in The Globe and Mail, Canadian Mortgage Trends, and the Mortgage Broker News daily brief. He sits on his network's lender-relations committee.

Trustworthiness. Every figure produced by this tool is verified against three independent reference implementations: the closed-form amortisation payment formula, a period-by-period principal-and-interest simulation, and the Excel PMT() / IPMT() / PPMT() family. Disagreement greater than one cent blocks release. David reviews every release of the engine and every page of reference content before publication. The most recent end-to-end review was completed in May 2026.

The math, in one paragraph

For loan principal P, periodic interest rate r, and total number of periods n, the periodic payment that fully amortises the loan is  PMT = P · r · (1+r)n / ((1+r)n − 1). Each period, interest equals balance × r, principal paid equals PMT − interest, and the balance falls by the principal portion. Because the balance falls each period, interest is largest in period 1 and smallest in the final period; principal paid follows the inverse trajectory. An extra payment accelerates this curve: every dollar of extra principal paid in period k eliminates not only itself but every future interest charge that dollar would have accrued. The savings compound. Full derivation and worked examples are on the extra payments page.

Reference: extra-payment effect on a $250k / 25y / 5.95% loan

Notice that interest savings grow much faster than the extra payment scales. $100 extra per month for the full term is $30,000 of additional principal paid; the interest saved is nearly the same amount. $1,000 extra per month is $300,000 of additional payment over the original schedule but saves $140,000 in interest. The marginal return on an extra dollar of principal payment is high in the early years and low later.

Verification methodology

1. Closed-form formula. Standard amortisation payment equation in a single expression.
2. Period-by-period simulation. A loop that subtracts each period's principal and accrues interest on the balance, with extra-payment logic applied at each step.
3. Excel cross-check. Identical inputs passed to PMT(), IPMT(), PPMT(), and NPER(). All four functions must agree to the cent.

Frequently asked questions

Does the calculator account for prepayment penalties?

No. Most Canadian fixed-rate mortgages charge an Interest Rate Differential (IRD) penalty on early payout above the prepayment-privilege limit. The calculator assumes unlimited prepayment ability, which is realistic for accelerated bi-weekly schedules and for extra payments within standard 10–20 % annual privilege limits, but not for full lump-sum payouts. Verify your contract terms.

Does this work for variable-rate loans?

The calculator assumes a constant rate throughout the term. Variable-rate loans repeatedly recompute the payment as the rate changes; the projection here is an approximation that matches the realised result only if rates remain stable.

What about taxes and insurance?

Not included. The figure shown is principal + interest only. For a complete monthly housing cost, add property tax, insurance, and any condo / HOA fees on top.