A $500,000 mortgage at 4.85% over 25 years has a monthly payment of $2,865.48 and costs $359,643 in interest. Enter your own loan below to see the payment, the total interest and a table for every year.
Why is so little of the early payment principal?
Every payment splits into interest and principal. Interest is charged on what you still owe, so the early payments are mostly interest. Once the balance drops, less of each payment goes to interest and more to principal, until the schedule ends at zero.
Look at the very first payment on this loan. Of the $2,865.48, about $2,000.71 is interest and only $864.77 chips away at the debt. Principal doesn’t overtake interest until the 128th payment, which is almost eleven years in.
That has a practical side. Any principal you pay off early stops charging interest for all the years left, so a few bucks of extra payment in year one does more work than the same few bucks in year twenty. Check your lender’s prepayment rules first, since lenders set their own limits on extra payments.
The last payment differs slightly from the rest. The regular payment is rounded to the cent, so the final one clears the small remainder.
One more thing about the maths. Under the Interest Act, fixed-rate mortgages here compound twice a year, and this tool follows that method. Divide the annual rate by twelve instead and you’d understate the cost, which on a large loan adds up to real money every month.
What does the loan look like year by year?
| Year | Principal paid | Interest paid | Balance at year end |
|---|---|---|---|
| 1 | $10,609 | $23,777 | $489,391 |
| 5 | $12,850 | $21,536 | $441,487 |
| 10 | $16,329 | $18,056 | $367,132 |
| 15 | $20,750 | $13,635 | $272,645 |
| 20 | $26,369 | $8,017 | $152,576 |
| 25 | $33,507 | $878 | $0 |
Is a longer amortization worth it?
In the first year you pay $34,386 in total, and only $10,609 of it reduces the loan. Fifteen years in, which is 60% of the term, you still owe $272,645, more than half of what you borrowed. Over the whole term, 41.8% of everything you pay is interest.
Now compare terms on the same loan. A 20-year amortization costs $3,245.26 a month and $278,860 of interest, which is $379.78 more each month and $80,783 less interest than on the 25-year plan. Stretch it to 30 years and you pay $2,623.84 a month, $241.64 less, but interest climbs to $444,585, or $84,942 more.
What about bi-weekly? Over 25 years that’s a $1,321.11 payment every other week, with $358,717 in interest. You save only $926, because these payments aren’t the accelerated kind.
So which one should you pick? It comes down to cash flow. If the extra $380 a month for the 20-year plan fits without squeezing groceries and the kids’ hockey, the interest saving is big. If it doesn’t, a longer schedule keeps the payment manageable, and you can still add extra payments later when money’s looser.
Is amortization the same as the mortgage term?
No, and plenty of people mix them up. The term is the stretch for which your rate is fixed, and it’s shorter than the amortization.
Cheaper each month doesn’t mean cheaper overall. A longer amortization cuts your monthly bill but adds tens of thousands in interest. The calculator also assumes one rate for the whole amortization, while a real mortgage is renewed every few years at whatever rate applies then, and it leaves out property tax and insurance premiums as well as extra payments, which the prepayment page covers. On an insured mortgage, a 30-year amortization is limited to first-time buyers and new builds.
To include the insurance premium and price a purchase, use the mortgage payment calculator. Planning to pay faster? The mortgage prepayment calculator measures what extra payments save. Thinking of a new loan? Try the refinance estimator. And the fixed vs variable mortgage calculator compares the two rate types.
What this page is based on
The compounding method follows Canada’s Interest Act, and the maths is a standard loan schedule with the final payment adjusted to clear the balance. Your lender’s statement may differ by a few dollars. This website has no connection with any lender or government body.
About this calculator
- What it does
- See your mortgage payment, total interest and a year-by-year amortization table.
- Category
- Mortgage
- Last checked
- September 30, 2026
- Result type
- Estimate for information only, not tax advice.
Frequently asked questions
What is the payment on a $500,000 mortgage?
At 4.85% over 25 years it's $2,865.48 a month, with $359,643 of interest over the term.
Why is so little principal paid at first?
Interest is charged on the full balance. In year one of the example, $23,777 of the $34,386 you pay is interest.
How much does a 20-year term save?
On the same loan it saves $80,783 in interest compared with 25 years, at $379.78 more per month.
Why is the final payment different?
The regular payment is rounded to the cent, and the last payment clears the small remainder.
Does bi-weekly change much?
Not by itself. Paying $1,321.11 every two weeks saves only $926 in interest on the example, since it isn't an accelerated schedule.
Sources and updates
Updated: . How we check rates · Editorial team · Updates