How is it calculated?
Canadian fixed-rate mortgages compound semi-annually, not monthly, so the effective monthly rate is (1 + rate ÷ 2)1/6 − 1. Accelerated bi-weekly payments equal half the monthly payment paid 26 times a year, which adds one extra monthly payment each year.
Worked example
Licensed mortgage brokers bid alongside banks, credit unions and private lenders on MortgageBids.ca. One broker bid can tap dozens of lenders, and on most prime mortgages the lender pays the broker, not you. Why use a mortgage broker · Get broker and lender bids
What should I do with the result?
Use it to set a budget or a target rate, then let brokers and lenders bid on your actual mortgage. Bids include rate, penalty method, prepayment and fees, so you can compare the full cost.
Frequently asked questions
What is accelerated bi-weekly?
Half your monthly payment every two weeks (26 payments), which equals 13 monthly payments a year.
Does the calculator include CMHC insurance?
Yes. With less than 20% down it adds the premium to the mortgage.
Related
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