Payment frequency can affect cash flow and the speed at which principal is reduced. The right choice depends on your budget, pay schedule, and mortgage contract.
Monthly Payments
Monthly payments are simple to budget and are commonly used for mortgage comparisons.
Bi-Weekly Payments
Bi-weekly payments divide the annual payment schedule into more frequent payments. Confirm whether the lender treats the payment as standard or accelerated.
Accelerated Bi-Weekly Payments
Accelerated bi-weekly payments may result in paying more principal over the year than a standard monthly schedule. This can reduce interest over time when the contract permits it.
Related Tool
Use the Mortgage Renewal Calculator Canada to test payment-frequency scenarios before accepting a renewal offer.
Disclaimer: Payment estimates are general and may differ from your lender’s exact calculation.
Example Scenario
A homeowner paid monthly during the previous term but is paid every two weeks at work. At renewal, they compare monthly, standard bi-weekly, and accelerated bi-weekly payments. The accelerated option may increase the amount paid over a year, so it can reduce principal faster, but it also requires more room in the household budget.
How to Compare Payment Frequencies Fairly
Ask the lender to show the annual amount paid under each frequency, not only the payment shown on the renewal form. A lower-looking bi-weekly payment may simply be the monthly amount divided into smaller pieces, while an accelerated bi-weekly schedule can result in extra principal reduction over time.
Questions to Ask Your Lender
- Is this standard bi-weekly or accelerated bi-weekly?
- What is the total amount paid over one year under each option?
- Can the payment frequency be changed during the term?
- Would a higher regular payment count toward the mortgage’s prepayment privilege?
Use the Mortgage Renewal Calculator Canada to test payment frequency scenarios, and review the Guides page before accepting a renewal offer. Estimates are educational only and may differ from lender calculations.