When you sign a Canadian mortgage you’re asked how often you want to pay. Six options look similar, but two of them can save you tens of thousands of dollars.
The six frequencies
| Frequency | How the payment is set | Paid per year |
|---|---|---|
| Monthly | M | 12 × M |
| Semi-monthly | M ÷ 2, 24 times | 12 × M |
| Biweekly | 12M ÷ 26, 26 times | 12 × M |
| Weekly | 12M ÷ 52, 52 times | 12 × M |
| Accelerated biweekly | M ÷ 2, 26 times | 13 × M |
| Accelerated weekly | M ÷ 4, 52 times | 13 × M |
The regular options pay the same total each year as monthly. The accelerated ones pay one extra monthly payment a year, and that extra goes entirely to principal.
How much accelerated biweekly saves
On a $600,000 mortgage at 4.49% over 25 years:
- Monthly: $3,317.50, about $395,000 of interest, paid off in 25 years.
- Biweekly: $1,531.16, saving only about $1,800.
- Accelerated biweekly: $1,658.75, saving about $59,900 and finishing in 21 years 8 months.
- Accelerated weekly: $829.38, saving about $60,500.
Why regular biweekly saves so little
Paying every two weeks means principal falls a few days sooner than with monthly payments, so slightly less interest builds up. But you aren’t paying more money, so the effect is small. The real savings come from the 13th payment.
Is accelerated right for you?
- Yes if you are paid every two weeks and the payment fits. It’s automatic, and it doesn’t use your prepayment privileges.
- Maybe not if your budget is tight. The extra payment is equivalent to an 8.3% higher monthly cost. You can get similar savings with a lump sum when cash allows.
- If you qualify only at the monthly payment, you can usually switch to accelerated later.
Key takeaways
- “Biweekly” and “accelerated biweekly” are different products.
- Accelerated payments add the equivalent of one monthly payment a year and take roughly 3 years off a 25-year mortgage.
- Try your own numbers with the payment frequency calculator.
Try it with your numbers: Compare all six frequencies →