Amortization Schedule

An amortization schedule is a table that shows how each mortgage payment is divided between interest and principal over the life of the loan, along with the remaining balance after every payment. Early payments are mostly interest; later payments are mostly principal, because interest is charged on the outstanding balance, which shrinks slowly at first.

How the Split Works

Canadian mortgages compound semi-annually, not monthly, which affects how the interest portion of each payment is calculated. Lenders convert the annual rate into a periodic rate that matches your payment frequency, then apply it to the balance at that point in time. On a fixed-rate mortgage the payment itself stays level, so as the balance falls the interest slice gets smaller and the principal slice grows.

A simple illustration, using round numbers rather than any real rate: on a large balance, an early payment might be mostly interest with only a small amount reducing the balance. Decades later, the same payment is almost entirely principal. The schedule makes that shift visible, payment by payment.

Payment number — where you are in the sequence.
Interest portion — calculated on the balance at that point.
Principal portion — what actually reduces what you owe.
Balance — what remains after the payment.

Why It Matters to Borrowers

Reading your schedule shows how little equity a mortgage builds in the first years, which is useful context when comparing a shorter amortization period against a longer one. It also shows what a lump-sum payment does: an extra payment applied directly to principal removes the interest that would have accrued on that amount for every remaining year, so its effect is larger early in the schedule. Your lender must provide this information, and you can reproduce it with an amortization schedule calculator.

Things That Change the Schedule

Changing payment frequency, making prepayments within your prepayment privilege, or renewing at a different rate all produce a new schedule. On a variable-rate mortgage with fixed payments, a rate change shifts the interest and principal split without changing the payment, and in some cases the balance can stop falling, a situation known as negative amortization. Ask your lender for an updated schedule after any of these events.

Frequently asked questions

What does an amortization schedule show?

It lists every scheduled payment over the amortization period and breaks each one into the interest portion, the principal portion, and the balance remaining afterward. Early rows are interest-heavy and later rows are principal-heavy, which is why a mortgage builds equity slowly at first and faster toward the end.

Does paying extra change my amortization schedule?

Yes. A lump-sum payment or accelerated payment reduces the balance, so less interest accrues and more of each later payment goes to principal. That shortens the schedule. Confirm your prepayment limits first, since exceeding the annual allowance on a closed mortgage can trigger a prepayment penalty.

Where do I get my amortization schedule?

Your lender or broker can provide one, and many online banking portals show it alongside your mortgage account. You can also generate your own using a mortgage payment calculator, which is useful for comparing how different rates, terms, payment frequencies, or prepayments change the timeline.