Canadian mortgage amortization calculator
Every payment splits between interest and principal. This calculator uses the Canadian compounding rule and shows how the balance falls and how much equity you build in year one.
Principal paydown is one return. BrickROI shows them all.
Cash flow is only part of the picture. BrickROI runs the full 25-year proforma on your real listing: cash flow, principal paydown, appreciation, DSCR, the CMHC and MLI Select paths, and a lender-ready PDF. Paste a Canadian listing and see it in two minutes.
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How a Canadian mortgage pays down
Your payment stays the same each month, but what it buys changes. At the start, most of the payment is interest, because the balance is large. As the balance shrinks, more of each payment goes to principal. By the end of the term, almost all of it is principal. The amortisation schedule is the year-by-year map of that shift.
Canadian fixed mortgages compound twice a year, not monthly like a US loan. This calculator uses the Canadian rule, so the interest and principal split lines up with your lender's statement. A US tool would show a slightly different split and a slightly different payment.
Principal paydown is a quiet return
For an investor, the principal column is money the tenant is paying down for you. It does not show up in cash flow or cash-on-cash, because it is not cash you can spend this year. But it is real equity, and over a long hold it adds up to a large part of the total return. When you compare a deal's cash-on-cash to its full return, the gap is mostly principal paydown and appreciation.
The amortisation trade
- A longer amortisation lowers the payment and lifts cash flow, but raises the total interest you pay.
- A shorter amortisation builds equity faster but squeezes monthly cash flow.
- The 40-year path through CMHC MLI Select is the longest available and is tied to that program.
Amortisation questions
What is an amortisation schedule?
It is the breakdown of how each mortgage payment splits between interest and principal over the life of the loan. Early on, most of the payment is interest. Over time, more goes to principal. The schedule shows the balance falling year by year.
How does Canadian amortisation differ from the US?
Canadian fixed mortgages compound interest twice a year, not monthly. This calculator uses that rule, so the interest and principal split matches what your lender shows. A US schedule would be slightly off.
Why does principal paydown matter to an investor?
Principal paydown is a real return that does not show up in cash flow. Every payment, your tenant helps shrink your loan. Over years that builds equity. It is not cash in your pocket today, so it sits outside cash-on-cash, but it is part of the full return.
How much does a longer amortisation cost me?
A longer term lowers each payment but raises the total interest you pay over the life of the loan. You trade lower monthly cost for higher lifetime cost. For a rental, that lower payment can be the difference between positive and negative cash flow.