WELL MAYBE THE MYTH DIDN'T DEFINE IT WELL
HERE ARE DEFINITIONS for THE MORTGAGE INDUSTRY
Original mortgage amount
The original amount financed with your mortgage, not to be confused with the remaining balance or
Annual interest rate. Maximum interest rate is 20%. All Canadian mortgages use semi-annual
compounding of interest.
Total length of your original mortgage in years. Most common lengths are 20 years and 25 years.
Accelerated weekly and bi-weekly payments
Accelerated weekly and accelerated bi-weekly payment options are calculated by taking a monthly
payment schedule and assuming only four weeks in a month. We calculate an accelerated weekly
payment, for example, by taking your normal monthly payment and dividing it by four. Since you pay 52
weekly payments, by the end of a year you have paid the equivalent of one extra monthly payment. This
additional amount accelerates your loan payoff by going directly against your loan's principal. The effect
can save you thousands in interest and take years off of your mortgage.
The accelerated bi-weekly payment is calculated by dividing your monthly payment by two. You then
make 26 bi-weekly payments. Just like the accelerated weekly payments you are in effect paying an
additional monthly payment per year.
Number of years remaining
This is the total number of years you have left to pay on your mortgage. The earlier you start your payoff
plan, the more interest you can save. Just starting a few years earlier can really add up.
This is the type of prepayment you are going to make. You can choose from one time, monthly, weekly,
bi-weekly, semi-monthly or yearly.
Your proposed extra payment per period, e.g. weekly, bi-weekly, semi-monthly, etc. This payment will be
used to reduce your principal balance.
Information and interactive calculators are made available to you as self-help tools for your independent
use. We can not and do not guarantee their applicability or accuracy in regards to your individual
circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek
personalized advice from a Dominion Lending Centres qualified Expert regarding all personal finance issues