If you’re planning to take out a loan in Canada, it’s important to understand how the loan amortization schedule works. The loan amortization schedule is a table that shows the breakdown of each payment you make over the life of the loan. It includes details such as the amount of the payment, the interest paid, the principal paid, and the remaining balance. A loan amortization schedule can help you plan your budget and understand how much of your payment goes towards paying off the principal versus the interest.
To calculate a loan amortization schedule, you can use an online calculator or create a spreadsheet. The calculator will ask for information such as the loan amount, the interest rate, and the loan term. Once you input this information, the calculator will generate a schedule that shows each payment and how it affects the balance of the loan. This schedule can be especially helpful if you’re considering making extra payments or want to see how different interest rates would affect your loan.
In Canada, loans are typically amortized over a period of 25 years, although shorter or longer terms are also available. The interest rate you receive will depend on factors such as your credit score, income, and the type of loan you’re applying for. It’s important to shop around and compare rates from different lenders to ensure you’re getting the best deal.
By understanding how to calculate a loan amortization schedule, you can make more informed decisions about your finances. Whether you’re planning to buy a home, purchase a car, or fund a major expense, a loan amortization schedule can help you see the bigger picture and plan for the future.
Understanding Loan Amortization
Loan amortization refers to the process of paying off a loan over a set period of time through regular payments. It is a common practice in Canada and is often used for mortgages, car loans, and other types of financial loans.
Loan amortization is calculated using an amortization schedule, which outlines the repayment plan for the loan. This schedule includes information such as the loan amount, interest rate, loan term, and the monthly payment amount.
By using a loan amortization calculator, borrowers can get a clear understanding of how much they will need to repay each month and how much of their payment goes towards the principal balance and interest.
In Canada, loans are typically amortized over a period of 15 to 30 years for mortgages, while car loans and other types of loans may have shorter amortization periods. The longer the amortization period, the lower the monthly payment amount, but the more interest borrowers will end up paying over the life of the loan.
One important thing to note is that in Canada, mortgages often have a fixed interest rate for a set term, such as five years. At the end of the term, the borrower can renegotiate the interest rate or terms of the loan, or choose to pay off the remaining balance in full.
Understanding loan amortization is crucial for borrowers in Canada, as it allows them to plan their finances effectively and make informed decisions about their loan repayment strategy.
Determining Loan Term
When calculating a loan amortization schedule, it is important to determine the loan term. The loan term is the length of time over which the loan will be repaid. The loan term affects the monthly payment amount and the total amount of interest paid over the life of the loan.
There are a few factors to consider when determining the loan term. Firstly, the borrower’s financial situation should be taken into account. It is important to calculate the monthly payment that the borrower can comfortably afford. This will help determine the loan term that is most suitable.
Secondly, the interest rate on the loan will also impact the loan term. A higher interest rate will result in higher monthly payments, which may mean a shorter loan term is needed to keep the payments affordable.
Lastly, the loan amortization schedule can be used as a tool to determine the loan term. By using an online loan calculator or an amortization schedule, the borrower can input different loan terms to see how it affects the monthly payment amount and the total interest paid.
It is important to note that a shorter loan term will result in higher monthly payments, but less interest paid overall. On the other hand, a longer loan term will result in lower monthly payments, but more interest paid over the life of the loan.
Ultimately, the borrower should carefully consider their financial situation and goals when determining the loan term. By using a loan calculator and reviewing the amortization schedule, the borrower can make an informed decision about the loan term that is most suitable for their needs.
Calculating Loan Principal
Before diving into the details of calculating loan amortization schedule in Canada, it’s important to understand what exactly the loan principal is. The loan principal refers to the original amount of money borrowed from a lender.
To calculate the loan principal, you need to have some information handy. Firstly, you will need to know the interest rate on the loan, which is the annual cost of borrowing expressed as a percentage. Additionally, you will also need the loan term, which is the length of time over which the loan is to be repaid.
Using a loan calculator, you can input the interest rate, loan term, and the desired payment amount to calculate the loan principal. The calculator will take into account these factors and determine the principal amount that can be borrowed based on them. It’s important to note that the loan principal will vary depending on the interest rate and loan term.
Let’s say you are looking to take out a loan in Canada with an interest rate of 5% and a loan term of 5 years. By using a loan calculator, you can input these details and determine the loan principal based on your desired payment amount.
Once you have determined the loan principal, you can then use it to calculate the loan amortization schedule. This schedule will outline the repayment structure of the loan, including the principal and interest payments for each period.
In conclusion, calculating the loan principal is an important step in determining the loan amount you can borrow. By using a loan calculator, you can easily input the necessary details and determine the principal based on your desired payment amount, interest rate, and loan term.
Estimating Interest Rate
When calculating an amortization schedule for a loan, one important factor to consider is the interest rate. The interest rate is the cost of borrowing money, usually expressed as a percentage. The interest rate directly affects the monthly payment amount and the total interest paid over the life of the loan.
There are several ways to estimate the interest rate for a loan:
|Use a Loan Calculator
|One of the easiest ways to estimate the interest rate is to use an online loan calculator. These calculators allow you to input the loan amount, term, and monthly payment to determine the interest rate. It’s a handy tool to quickly get an estimate of the interest rate.
|Research Current Interest Rates
|Another way to estimate the interest rate is to research current interest rates offered by banks and financial institutions. This can give you a general idea of the prevailing interest rates for loans. Keep in mind that your credit score and other factors can affect the interest rate you qualify for.
|Consult with Lenders
|If you’re serious about obtaining a loan, it’s a good idea to consult with lenders directly. They can provide personalized estimates based on your financial situation. Lenders can also provide information about different loan products and their associated interest rates.
Estimating the interest rate is an important step in calculating the amortization schedule for a loan. It helps determine the monthly payment amount and allows you to plan your finances accordingly. By using a loan calculator, researching current interest rates, or consulting with lenders, you can make a more informed decision about your loan.
Choosing Payment Frequency
When calculating loan amortization schedules in Canada, it is important to consider the payment frequency. The payment frequency refers to how often you make payments towards your loan, whether it be monthly, bi-weekly, or weekly.
There are a few factors to consider when choosing the payment frequency for your loan. Firstly, it is important to consider your budget and cash flow. If you prefer a smaller, more manageable payment, you may opt for a monthly payment frequency. On the other hand, if you have a steady and consistent income, you may choose a more frequent payment frequency to pay off your loan faster.
Monthly Payment Frequency
The monthly payment frequency is the most common choice among borrowers in Canada. With this option, you make one payment per month towards your loan. This can be a convenient option for those who prefer to have a consistent payment schedule and budget their expenses accordingly.
However, it is important to note that with a monthly payment frequency, you will end up making fewer payments per year compared to more frequent payment frequencies. This means that the total interest paid over the life of the loan may be higher compared to more frequent payment options.
Bi-Weekly Payment Frequency
The bi-weekly payment frequency is another popular option in Canada. With this option, you make payments every two weeks, resulting in 26 payments per year. This means that you make one extra payment per year compared to the monthly payment frequency.
The advantage of the bi-weekly payment frequency is that you can pay off your loan faster and reduce the total interest paid. By making more frequent payments, you can reduce the principal amount faster and save on interest charges.
It is important to note that not all lenders offer a bi-weekly payment frequency option. Before choosing this frequency, make sure to check with your lender to ensure that it is available.
Weekly Payment Frequency
The weekly payment frequency is the most frequent option available. With this option, you make payments every week, resulting in 52 payments per year. Similar to the bi-weekly payment frequency, this frequency allows you to make one extra payment per year compared to the monthly payment frequency.
Choosing the weekly payment frequency can be beneficial for those who have a higher income or prefer to pay off their loan as quickly as possible. By making more frequent payments, you can reduce the principal amount faster and save on interest charges.
It is important to note that not all lenders offer a weekly payment frequency option. Before choosing this frequency, make sure to check with your lender to ensure that it is available.
Using a loan amortization calculator can help you determine the impact of different payment frequencies on your loan repayment. It allows you to input the loan details and calculate the monthly payment and total interest paid based on the frequency you choose. This can help you make an informed decision when choosing the payment frequency that works best for you.
Accounting for Prepayments
In Canada, when calculating a loan amortization schedule, it’s important to account for prepayments. Prepayments are extra payments made towards the principal amount of a loan, typically in addition to regular monthly payments. These prepayments can help borrowers pay off their loans faster and save on interest costs.
When accounting for prepayments, it’s important to consider how they affect the loan amortization schedule. Prepayments can be made as a lump sum payment or as additional monthly payments. Either way, they reduce the outstanding principal balance of the loan, which in turn reduces the amount of interest paid over the life of the loan.
A loan amortization schedule can be helpful in determining the impact of prepayments. This schedule breaks down each payment into its principal and interest components, allowing borrowers to see how their payments are applied to the loan balance.
When prepayments are made, the loan amortization schedule needs to be updated to reflect the new remaining balance and the revised interest charges. This update can be done manually or by using a loan amortization calculator specific to Canada. These calculators take into account prepayments and provide an updated schedule that reflects the impact of the extra payments.
By accounting for prepayments in the loan amortization schedule, borrowers can have a clearer understanding of how their payments are reducing their loan balance and shortening the life of their loan. This can be particularly beneficial for borrowers looking to pay off their loans faster and save on interest costs.
Calculating Monthly Payments
Calculating the monthly loan payments for an amortization schedule in Canada can be done using a basic formula. The formula takes into account the principal amount, interest rate, and loan term.
To calculate the monthly payment, you can use the following formula:
Monthly Payment = P * r * (1+r)^n / ((1+r)^n-1)
P = Principal amount of the loan
r = Monthly interest rate, calculated as the annual interest rate divided by 12
n = Total number of monthly payments
For example, let’s say you have a loan with a principal amount of $100,000, an annual interest rate of 5%, and a loan term of 10 years (or 120 monthly payments). Using the formula above, you can calculate the monthly payment:
P = $100,000
r = 5% / 12 = 0.4167%
n = 120
Plugging these values into the formula:
Monthly Payment = $100,000 * 0.4167% * (1+0.4167%)^120 / ((1+0.4167%)^120-1)
After calculating, you would find that the monthly payment for this loan would be approximately $1,073.64.
It’s important to note that this formula assumes a fixed interest rate and equal monthly payments over the term of the loan. If you have a variable interest rate or a loan with changing monthly payments, the calculation may be more complex.
Using this formula, you can easily calculate the monthly loan payments for any loan amount, interest rate, and loan term, allowing you to create an amortization schedule for your loan in Canada.
Creating an Amortization Table
Once you have obtained a loan in Canada, it’s important to understand how your payments will be structured over time. An amortization table can help you track the repayment of your loan and understand how much of each payment goes towards the principal amount and interest.
To create an amortization table, you can use a loan amortization calculator. These calculators are widely available online and can provide you with a detailed breakdown of your loan repayment plan. Simply input the loan amount, interest rate, and term of the loan, and the calculator will generate the amortization schedule.
The amortization table will typically include the following information:
- Payment number: This column indicates the number of each payment, starting from the first payment.
- Payment date: The date on which each payment is due.
- Payment amount: The total amount you need to pay each month, including both principal and interest.
- Principal paid: The portion of each payment that goes towards reducing your loan balance.
- Interest paid: The amount of interest you pay each month.
- Remaining balance: The outstanding balance of your loan after each payment.
By referring to the amortization table, you can keep track of your loan repayment progress and make informed decisions about your finances. It helps you understand how much interest you’re paying over time and how long it will take to pay off your loan.
Don’t forget that the loan amortization table is based on the assumption that you will make each payment on time and in full. Any missed or partial payments may impact the overall repayment structure.
Generating an amortization table is a simple yet crucial step in managing your loan in Canada. It provides you with a clear overview of your repayment plan and allows you to stay on track towards financial freedom.
Explaining Principal vs. Interest Breakdown
When using a loan amortization calculator in Canada, it’s important to understand the breakdown between the principal and the interest in each payment. This breakdown can help borrowers understand how their payments are allocated and how much of their loan is being paid down over time.
The principal refers to the original amount of money borrowed, while the interest is the additional amount paid to the lender for borrowing that money. In an amortizing loan, such as a mortgage, each payment is typically made up of both principal and interest.
During the early years of a loan term, a larger portion of each payment goes towards paying off the interest, while a smaller amount goes towards the principal. This is because interest is calculated based on the outstanding loan balance, which is highest at the beginning of the loan term.
As time goes on and more payments are made, the balance of the loan decreases, resulting in less interest being charged. This allows a larger portion of each payment to be applied towards the principal. Over time, the principal balance is gradually reduced, resulting in an increasing equity in the loan.
Understanding the principal vs. interest breakdown can help borrowers see how much progress they are making in paying down their loan. It can also help them make financial decisions, such as whether to make additional payments towards the principal or to refinance the loan to take advantage of lower interest rates.
By using a loan amortization calculator, borrowers can easily see the breakdown of their payments and understand how much of their monthly payment is going towards the principal and how much is going towards the interest. This information can be valuable in helping borrowers stay informed and make smart financial choices.
Identifying Total Interest Paid
Knowing the total interest paid on a loan can help borrowers understand the overall cost of the loan and make better financial decisions. In Canada, calculating the total interest paid can be done easily using an amortization calculator.
Here is a step-by-step guide on how to identify the total interest paid on a loan using a loan amortization calculator:
Step 1: Gather Loan Details
Before using the calculator, gather all the necessary details about the loan. This includes the loan amount, interest rate, loan term, and payment frequency. Having this information on hand will make the calculation process much smoother.
Step 2: Enter Loan Details into the Calculator
Open the loan amortization calculator and enter the loan details. Fill in the loan amount, interest rate, loan term, and payment frequency fields. Make sure to choose the appropriate payment frequency, such as monthly, bi-weekly, or weekly.
Step 3: Generate the Amortization Schedule
Once all the loan details are entered, click on the “Calculate” button to generate the loan amortization schedule. This schedule will provide a breakdown of each payment, including the principal amount, interest amount, and remaining balance.
Step 4: Identify Total Interest Paid
To determine the total interest paid, add up all the interest amounts listed in the amortization schedule. This will give you a clear picture of how much interest you will pay over the life of the loan.
By understanding the total interest paid, borrowers can make informed decisions about their loans and potentially seek better financial options. Using a loan amortization calculator can simplify this process and provide accurate calculations for borrowers in Canada.
Understanding Loan-to-Value Ratio
When obtaining a loan, one important factor to consider is the loan-to-value ratio (LTV). The LTV is a calculation that measures the loan amount compared to the appraised value of the property.
This ratio is used by lenders in Canada to assess the risk associated with a loan. It helps them determine the amount of money they are willing to lend based on the value of the property being used as collateral. The higher the loan-to-value ratio, the higher the risk for the lender.
Calculating the loan-to-value ratio is relatively simple. You divide the loan amount by the appraised value of the property and multiply by 100 to get a percentage. For example, if you are applying for a $200,000 loan and the property is appraised at $250,000, the loan-to-value ratio would be 80%.
In Canada, there are certain thresholds for loan-to-value ratios that lenders typically follow. For conventional mortgages, where the down payment is 20% or more, the maximum loan-to-value ratio is usually 80%. This means that the lender will not provide a loan that exceeds 80% of the property’s appraised value.
For high-ratio mortgages, where the down payment is less than 20%, the loan-to-value ratio can reach up to 95%. However, in these cases, the borrower will need to pay for mortgage default insurance to protect the lender in the event of default.
Understanding the loan-to-value ratio is crucial when applying for a loan in Canada. It can affect the amount of money you can borrow, the interest rate you will receive, and whether or not you will need to pay mortgage default insurance. It is always advisable to calculate the loan-to-value ratio using an online calculator or consult with a mortgage professional to ensure you have a clear understanding of the terms and conditions of your loan.
Considering Mortgage Insurance
When calculating your loan amortization schedule in Canada, it’s important to consider the option of mortgage insurance. Mortgage insurance is a type of insurance that protects lenders in case the borrower defaults on their mortgage payments. It’s usually required if the down payment on the loan is less than 20% of the purchase price of the property.
Mortgage insurance allows borrowers with a lower down payment to qualify for a loan. It helps mitigate the risk for lenders, making it easier for borrowers to obtain financing for their home purchase. Mortgage insurance premiums are typically added to the borrower’s monthly mortgage payment, and the cost of the premiums varies depending on the amount of the loan and the size of the down payment.
Using a specialized mortgage insurance calculator can help you determine the cost of mortgage insurance and how it will impact your monthly mortgage payments and overall amortization schedule. This calculator takes into account factors such as the mortgage amount, down payment, interest rate, and the specific terms of the mortgage insurance policy.
- Calculate the cost of mortgage insurance based on different down payment amounts.
- Estimate your monthly mortgage payment including the cost of mortgage insurance.
- Determine how long you will be required to carry mortgage insurance.
Keep in mind that mortgage insurance is different from homeowner’s insurance, which protects the borrower in case of property damage or loss. While homeowner’s insurance is usually optional, mortgage insurance is generally required for borrowers with a lower down payment. It’s important to factor in the cost of mortgage insurance when planning your budget and considering your options for financing a home purchase.
Understanding the role of mortgage insurance and using a mortgage insurance calculator can help you make informed decisions about your home purchase and budget. By considering mortgage insurance in your loan amortization schedule in Canada, you can better plan for the financial responsibilities of owning and paying off your mortgage.
Accounting for Property Taxes and Insurance
When calculating loan amortization schedules in Canada using a loan calculator, it is essential to account for property taxes and insurance costs. These additional expenses are often required to be paid on a regular basis and should be factored into the overall loan repayment plan.
Property taxes are assessed by the local government and are based on the value of the property. The borrower is responsible for paying property taxes, which are typically due annually. However, some borrowers choose to pay them on a monthly basis by adding an amount equal to one-twelfth of the annual tax amount to their monthly mortgage payment. Including property taxes in the loan amortization schedule ensures that these expenses are spread out over the loan term, making it easier for borrowers to manage their budget.
In addition to property taxes, borrowers in Canada are also required to obtain property insurance. This insurance protects the property against damage or loss and is typically paid annually or on a monthly basis. When calculating the loan amortization schedule, it is important to add the monthly insurance premium to the monthly mortgage payment to ensure that the expense is accounted for.
By including property taxes and insurance in the loan amortization schedule, borrowers can accurately calculate their total monthly loan payment and plan their budget accordingly. This allows for better financial planning and ensures that all expenses related to the property are accounted for throughout the loan repayment period.
Adjusting for Variable Interest Rates
When calculating a loan amortization schedule in Canada, it is important to take into account the possibility of variable interest rates. Variable interest rates can have a significant impact on the overall cost and duration of a loan, so it is essential to adjust the amortization schedule accordingly.
What are variable interest rates?
Variable interest rates are interest rates that can change over the course of a loan. Unlike fixed interest rates, which remain constant throughout the loan term, variable interest rates are often tied to a benchmark rate, such as the Bank of Canada’s prime rate. These rates can fluctuate based on market conditions, monetary policy changes, and other factors.
How do variable interest rates affect loan amortization?
Variable interest rates can affect loan amortization in two main ways. First, they can impact the monthly payment amount. When interest rates increase, the monthly payment amount typically increases as well. Conversely, when interest rates decrease, the monthly payment amount may decrease. This can affect the overall affordability of the loan and the borrower’s cash flow.
Second, variable interest rates can affect the loan term. When interest rates increase, more of the monthly payment goes towards interest, leaving less to pay down the principal. This can extend the loan term and increase the overall cost of borrowing. On the other hand, when interest rates decrease, more of the monthly payment goes towards the principal, potentially shortening the loan term and reducing the total interest paid.
How to adjust the amortization schedule for variable interest rates?
When creating an amortization schedule for a loan with variable interest rates, it is crucial to consider the possibility of rate changes. This can be done by including a variable interest rate formula in the calculation, adjusting the monthly payment amount accordingly.
For example, if the loan has a fixed interest rate for the first five years and a variable interest rate thereafter, the amortization schedule can be split into two periods. The first period would use the fixed interest rate to determine the monthly payment amount and the allocation between principal and interest. The second period would use the variable interest rate formula to adjust the payment amount and allocation based on the prevailing interest rate.
Adjusting for variable interest rates is a crucial step when calculating a loan amortization schedule in Canada. By considering the potential fluctuations in interest rates, borrowers can better understand the impact on their monthly payments, loan term, and overall cost of borrowing. Understanding and accounting for variable interest rates can help borrowers make informed decisions and plan for potential changes in their financial obligations.
Analyzing Early Payment Options
When considering a loan in Canada, it is important to analyze the early payment options available to borrowers. Early repayment options can provide borrowers with the opportunity to pay off their loans sooner and potentially reduce the amount of interest paid over the life of the loan.
Early Repayment Calculator
One way to analyze early payment options is by using an early repayment calculator. This tool allows borrowers to input their loan details, such as the loan amount, interest rate, and term, and then calculate the impact of making additional payments towards the principal balance.
With an early repayment calculator, borrowers can see how making extra payments each month or on an annual basis can shorten the loan term and save them money in interest payments. It also provides an estimate of the total interest savings and the new payoff date.
Amortization Schedule Analysis
Another way to analyze early payment options is by examining the loan’s amortization schedule. The amortization schedule provides a detailed breakdown of each payment throughout the loan term, including the portion that goes towards the principal balance and the interest charged.
By studying the amortization schedule, borrowers can identify the impact of making extra payments at different points in the loan term. For example, making additional payments in the early years of the loan will have a greater impact on the total interest paid compared to making the same payments in the later years.
By analyzing the amortization schedule, borrowers can determine the optimal time to make extra payments to maximize interest savings and shorten the loan term.
It is important to note that some loans in Canada may have restrictions on early payments or may charge penalties for prepayment. Borrowers should review the terms and conditions of their loan agreement or consult with their lender to understand any limitations or fees associated with early repayment.
Analyzing early payment options is a crucial step in managing a loan in Canada. By using tools like an early repayment calculator and studying the loan’s amortization schedule, borrowers can make informed decisions about making additional payments towards their loan. This analysis can result in significant interest savings and potentially a shorter loan term.
Reviewing Loan Amortization Schedule
After using a loan amortization schedule calculator to determine the repayment amounts for your loan, it’s important to review the schedule to fully understand how your payments will be applied over time.
The loan amortization schedule outlines each payment you will make over the life of the loan, breaking it down into three main components: principal, interest, and total payment. This schedule allows you to see how much of each payment will go towards reducing the principal balance, how much will go towards paying interest charges, and the total amount you will need to pay each month or year.
By reviewing the loan amortization schedule, you can gain insights into the overall cost of the loan and make informed decisions about your finances. Here are a few key points to consider:
- Principal Reduction: As you make payments, a portion of each payment is applied towards reducing the principal balance. Reviewing the schedule allows you to track how the principal balance decreases over time.
- Interest Charges: The schedule also shows how much of each payment is applied towards interest charges. This allows you to understand how much you will be paying in interest over the life of the loan.
- Total Payment: The total payment amount is the sum of the principal and interest for each payment period. Reviewing the schedule helps you plan your budget and ensures you are prepared for each payment.
- Total Interest Paid: By reviewing the schedule, you can calculate the total amount of interest you will pay over the life of the loan. This can help you evaluate the overall cost of the loan and consider strategies for paying it off sooner.
Reviewing the loan amortization schedule is an important step in understanding the terms and conditions of your loan. It allows you to visualize how your payments will be allocated and make informed decisions about your financial situation.
How does loan amortization work in Canada?
In Canada, loan amortization refers to the process of gradually paying off a debt over a fixed period of time through regular payments. These payments typically include both principal and interest, with the interest portion decreasing over time as the principal balance is reduced.
What factors are considered when calculating a loan amortization schedule?
When calculating a loan amortization schedule, several factors are taken into account. These include the loan amount, interest rate, loan term, and payment frequency. Other factors may also be considered, such as any additional fees or charges associated with the loan.
How can I calculate my loan amortization schedule?
To calculate your loan amortization schedule, you can use a loan amortization calculator or a financial spreadsheet program. These tools typically require you to input the loan amount, interest rate, loan term, and payment frequency. The calculator will then generate a schedule showing the breakdown of each payment, including how much is applied to principal and how much is paid in interest at each stage of the loan.
What is the benefit of knowing my loan amortization schedule?
Knowing your loan amortization schedule can be beneficial for several reasons. Firstly, it allows you to understand how much of your regular payment goes towards paying off the principal balance and how much goes towards interest. This can help you make informed decisions about your finances and budget. Additionally, it can also help you determine the impact of making extra payments or paying off your loan early.
Can my loan amortization schedule change over time?
In most cases, your loan amortization schedule will be fixed and will not change over time. This means that each payment will remain the same throughout the term of the loan, with the amount applied to principal and interest adjusting accordingly. However, there may be situations where the schedule can change, such as if you refinance your loan or make additional principal payments that alter the payment structure.
What does loan amortization mean?
Loan amortization refers to the process of paying off a loan over time through regular payments. Each payment is divided between interest and principal, with more interest being paid off at the beginning of the loan term and more principal being paid off towards the end.
How is a loan amortization schedule calculated in Canada?
A loan amortization schedule in Canada can be calculated using a formula that takes into account the loan amount, interest rate, and loan term. The formula calculates the monthly payment amount, as well as the breakdown between interest and principal for each payment.