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Loan Simulator 2026: calculate your payments and total cost
Understand how a loan works, compare options, and use our free simulator to calculate your monthly payments, total interest cost, and view the complete amortization schedule.
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Open the loan simulatorHow a Loan Works
A loan is a contract by which a lender advances an amount (the principal) to a borrower, who agrees to repay it with interest over a set period (the amortization). Each payment includes a portion of interest and a portion of principal repayment.
At the beginning of the amortization period, the bulk of each payment goes toward interest. Over time, the proportion reverses: more and more of each payment goes toward repaying the principal. This is called progressive amortization, and it is visible in the amortization schedule in our loan simulator.
Common Types of Loans
Mortgage
The most significant loan for most households. In Canada, the term (fixed-rate period) is generally 1 to 5 years, while the amortization can extend to 25 or 30 years. Mortgage rates in 2026 vary by term and borrower profile.
Car Loan
Typically over 3 to 7 years. Rates are generally higher than a mortgage because the vehicle depreciates. Be cautious with long-term loans (72–84 months), which significantly increase the total interest cost.
Personal Loan
Not secured by an asset, so rates are higher. Amortization is typically 1 to 5 years. Can be used for debt consolidation, home renovations, or a personal project.
How to Use Our Loan Simulator
Our simulator instantly calculates your payments based on four inputs: the amount borrowed, the annual interest rate, the amortization period, and the payment frequency. You can compare monthly and biweekly payments to see the potential savings.
The detailed amortization schedule shows the principal/interest breakdown for each payment, along with the remaining balance. It is an essential tool for financial advisors who want to demonstrate to clients the impact of the interest rate or term on the total cost.
For a complete analysis of existing debt, also use our debt analysis calculator, which shows the impact of extra payments.
Frequently Asked Questions
How is a loan's monthly payment calculated?
The monthly payment is calculated using the annuity formula: M = P × [r(1+r)^n] / [(1+r)^n – 1], where P is the principal borrowed, r is the monthly interest rate, and n is the number of payments. Our simulator performs this calculation automatically and accounts for the chosen payment frequency (monthly or biweekly).
What is the difference between the interest rate and the total cost of a loan?
The interest rate is the annual percentage charged on the outstanding balance. The total cost of the loan includes all interest paid over the entire amortization period, plus the principal. For example, a $300,000 mortgage at 5.5% over 25 years will cost approximately $268,000 in interest, for a total cost of $568,000.
Is paying biweekly instead of monthly advantageous?
Yes. By paying biweekly, you make 26 payments per year (equivalent to 13 monthly payments instead of 12). This extra payment reduces the principal more quickly, lowering total interest and shortening the amortization period. On a typical mortgage, this can save tens of thousands of dollars.
What is the maximum amortization period in Canada?
In 2026, the maximum amortization for an insured mortgage (down payment below 20%) is 25 years. For a conventional mortgage (down payment of 20% or more), some lenders offer up to 30 years of amortization. A longer amortization reduces monthly payments but significantly increases the total interest cost.
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Free simulator with complete amortization schedule.
Résumé en français :Ce guide explique le fonctionnement des prêts au Canada, couvrant les prêts hypothécaires, les prêts automobiles et les prêts personnels. Il détaille la mécanique du capital, des intérêts et de l'amortissement, explique les avantages des paiements aux deux semaines et propose un simulateur de prêt gratuit avec tableau d'amortissement complet.