A mortgage payment covers interest on the outstanding balance plus principal, so over the amortization period the balance falls to zero. Uniquely, Canadian fixed-rate mortgages are compounded semi-annually by law, so a quoted 5% works out to a slightly lower effective periodic rate than monthly compounding would — this tool uses the semi-annual convention. Variable-rate mortgages compound monthly.

Mortgages also run on a shorter term (often 5 years) than the full amortization, after which you renew at prevailing rates. Choosing accelerated bi-weekly payments (half the monthly amount every two weeks) adds the equivalent of one extra monthly payment a year, shortening the amortization. Insured mortgages (down payment under 20%) are capped at 25 years and require CMHC insurance.