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Mortgages: What are your mortgage payment options in Canada?

Whenbuying a property, you will need to decide what type of mortgage payments you want to make. This decision will most likely be determined primarily by your personal financial lifestyle – factors such as when you get paid and your personal budgets will be taken into account.

The total amount and frequency of your payments depends on the payment option you choose. There are several different options:

  • Monthly
  • Bi-weekly
  • Accelerated bi-weekly
  • Weekly
  • Accelerated weekly

The most popular options are monthly, bi-weekly and accelerated bi-weekly. However, this should not prevent you from exploring all the other possibilities available to you.

Monthly payments

Monthly payment is the simplest and most direct option available. You pay an amount from your bank account on a fixed day each month, and you can make 12 payments per year. It’s as simple as that.

This is the most popular mortgage option and traditionally the one most people choose, especially if the mortgage is a monthly one.

Bi-weekly payments

A bi-weekly payment allows you to pay bi-weekly throughout the year, which means 26 payments per year. To calculate it, simply take your usual monthly payment rate, multiply it by 12 and divide it by 26. People who are paid bi-weekly are most likely to be interested in this payment option.

Accelerated bi-weekly payments

This option is similar to the standard bi-weekly payment, but the calculation is a little different. You take your regular monthly payment and divide it by two, then the payment will be taken from your bank account every two weeks.

The payment is slightly higher than a standard bi-weekly payment, so you pay off your mortgage a little faster.

Weekly payments

Multiply your monthly payment by 12, then divide it by the 52 weeks of the year, and you will get your weekly mortgage payment rate. Therefore, with a weekly payment, you will make 52 payments per year. It can also help people who struggle to keep track of their personal finances from month to month and are concerned that they won’t be able to pay their mortgage if they wait until the end of the month.

Accelerated weekly payments

You divide your monthly payments by four and make 52 payments in a year. This amount is slightly higher than your regular weekly mortgage payment, so you can pay off your mortgage faster.

This may be more appropriate for people who are paid weekly rather than monthly.

Accelerated payments and regular payments

The only difference between these two types of payments is the way they are calculated.

An accelerated payment will cost a little more than a regular payment, but you will save a lot of money in the long run in interest because you will pay off your mortgage faster.

Looking for a competitive interest rate for your mortgage? Read our guides on nesto and Neo Mortgage Services (not available to Quebec residents):

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Jean-Maximilien Voisine
Jean-Maximilien is an expert in Canada and France about Loyalty programs, Credit cards and Travel. He is the Founding President of Milesopedia.

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