Mortgage Amortization Calculator RBC

RBC Amortization Formulas:

\[ I_k = B_{k-1} \times r \] \[ P_k = M - I_k \] \[ B_k = B_{k-1} - P_k \] \[ r = (1 + \frac{i}{2})^{\frac{1}{6}} - 1 \]

Loan Amount:

CAD

Annual Interest Rate:

Amortization Period:

years

Payment Frequency:

Payment Amount:

Total Interest:

Total Cost:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the RBC Mortgage Amortization Calculator?

Definition: This calculator computes mortgage payments and generates an amortization schedule using RBC's standard compounding method.

Purpose: It helps homebuyers understand their mortgage payments, interest costs, and how their loan balance decreases over time.

2. How Does the Calculator Work?

The calculator uses RBC's mortgage formulas:

\[ I_k = B_{k-1} \times r \] \[ P_k = M - I_k \] \[ B_k = B_{k-1} - P_k \] \[ r = (1 + \frac{i}{2})^{\frac{1}{6}} - 1 \]

Where:

\( I_k \) — Interest portion of payment k (CAD)
\( P_k \) — Principal portion of payment k (CAD)
\( B_k \) — Remaining balance after payment k (CAD)
\( r \) — Effective periodic rate (decimal)
\( M \) — Payment amount (CAD)
\( i \) — Annual interest rate (decimal)

Explanation: RBC uses semi-annual compounding converted to periodic rates based on payment frequency.

3. Importance of Mortgage Amortization

Details: Understanding amortization helps borrowers see how much interest they'll pay over the loan term and how extra payments can save money.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate, amortization period, and payment frequency. The calculator will show payment amount and total costs.

5. Frequently Asked Questions (FAQ)

Q1: Why does RBC use this compounding method?
A: Canadian mortgages typically use semi-annual compounding by law, converted to appropriate periodic rates.

Q2: How does payment frequency affect my mortgage?
A: More frequent payments (bi-weekly/weekly) reduce total interest paid and shorten amortization.

Q3: What's the difference between term and amortization?
A: Term is the length of your current contract (e.g., 5 years), while amortization is total time to pay off (e.g., 25 years).

Q4: Can I see the full amortization schedule?
A: This calculator shows summary results. For a full schedule, consult your RBC mortgage specialist.

Q5: How accurate is this calculator?
A: It provides estimates. Actual payments may vary slightly due to rounding and specific mortgage terms.