Payment Frequency
Canadian mortgage term definition with formula, examples, and limits used by mortgage brokers.
Definition
How often mortgage payments are made. Accelerated bi-weekly and accelerated weekly options result in one extra monthly payment per year, reducing amortization by 2-3 years.
Standard Limit
Options: Monthly, Semi-Monthly, Bi-Weekly, Accelerated Bi-Weekly, Weekly, Accelerated Weekly
Example
Accelerated bi-weekly: Monthly payment ÷ 2, paid every 2 weeks = 26 payments/year vs 24 for regular bi-weekly.
Related Terms
GDSMonthly housing costs divided by gross monthly income. Includes mortgage payment, property tax, heating, and 50% of condo fees.TDSAll monthly debt payments divided by gross monthly income. Includes housing costs plus credit cards, car loans, lines of credit, and other debts.LTVTotal mortgage debt divided by property value. Determines if CMHC insurance is required and which lenders qualify.CMHC InsuranceMandatory mortgage default insurance required when down payment is less than 20% (LTV > 80%). Enables up to 95% LTV financing.Stress TestBorrowers must qualify at a higher interest rate to ensure affordability if rates rise. Calculated as the maximum of contract rate + 2% or 5.25%.
Calculate Payment Frequency automatically
BIPS calculates GDS, TDS, LTV, stress test, and CMHC premiums automatically for every lender match.
Try BIPS free →