Amortization Periods

Amortization Periods
Amortization Period 10 years 15 years 20 years 25 years 30 years*
Mortgage amount $125,000 $125,000 $125,000 $125,000  $ 125,000
Interest rate1 5% 5% 5% 5% 5%
Amortization coefficient 0.01058 0.00788 0.00657 0.00582 0.00534 
Calculation of the monthly payments2 $125,000
× 0.01058
$1,322
$125,000
× 0.00788
$985
$125,000
× 0.00657
$821
$125,000
× 0.00582
$727
$125,000
× 0.00534
$668
Calculation of the mortgage costs3 $1,322
× 120 months
$158,640
$985
× 180 months
$177,300
$821
× 240 months
$196,040
$727
× 300 months
$218,100
$668
× 300 months
$200,400
Calculation of the interest paid $158,640
– $125,000
$33,640
$177,300
– $125,000
$52,300
$196,040
– $125,000
$72,040
$218,100
– $125,000
$93,100
$200,400
– $125,000
$75,400
Interest Savings4
(compared to a 25-year term)
$59,460 $40,800 $21,060    

Click here for information on the rates in effect.

Pretty wild, isn’t it? Just by shortening the amortization period from 25 to 20 years for a $125,000 mortgage at 5% interest, it’s possible to save more than $21,000! Granted, the monthly payments are higher by $94, yet what a difference overall! If you can afford it, don’t hesitate to do it!

 

Table of mortgage coefficients
Interest rate Mortgage amortization period
  10 years 15 years 20 years 25 years 30 years*
3.0% 0.00965 0.00690 0.00554 0.00473 0.00421
3.5% 0.00988 0.00714 0.00579 0.00499 0.00448
4.0% 0.01011 0.00738 0.00604 0.00526 0.00476
4.5% 0.01034 0.00763 0.00630 0.00553 0.00504
5.0% 0.01058 0.00788 0.00657 0.00582 0.00534
5.5% 0.01082 0.00814 0.00684 0.00610 0.00564
6.0% 0.01107 0.00840 0.00712 0.00640 0.00595
6.5% 0.01131 0.00866 0.00741 0.00670 0.00626
7.0% 0.01156 0.00893 0.00769 0.00700 0.00659
7.5% 0.01181 0.00921 0.00799 0.00732 0.00691
8.0% 0.01206 0.00948 0.00828 0.00763 0.00725
8.5% 0.01232 0.00976 0.00859 0.00795 0.00759
9.0% 0.01258 0.01005 0.00889 0.00828 0.00793
9.5% 0.01284 0.01033 0.00920 0.00861 0.00828
10.0% 0.01310 0.01062 0.00952 0.00894 0.00863

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Legal notice

1. Annual rate calculated on a half-yearly basis. The rate is provided for information purposes only.
2. Payments rounded off to the closest dollar.
3. Assuming the same interest rate for the entire amortization period.
4. The savings are based on a comparison with a $125,000 mortgage at a 5% interest rate amortized over 25 years.
* Maximum 25 years for insured loans.

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