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All the ways to save on your mortgage.

Here are 12 great ways to calm your (mortgage) budget woes.

With higher prices and rising rates, take advantage of these smart options to save cash, or free some up.

May 27, 2024

Updated from Oct. 11, 2023

12 Great Ways to Save On Your Mortgage

Feel like you're running up that (mortgage) hill?

Talking with Chirag Mehta, TNM Director of Operations:

Our clients are concerned about coping with higher interest rates and higher costs (such as city property taxes) — worried about the effects on their home affordability and monthly budgets.

Want to beat higher rates to save more? Or really need some extra budget room?

That budget 'relief' can look different for every client:

  • Access a lower rate
  • Improve affordability or free up monthly cash flow
  • Pay off your mortgage faster
  • Reduce your other debts
  • Take advantage of home equity

Whether you're buying a home or already have one, here are some tips to help make your mortgage work for you.

1. Save with your better rate, right off the start

It's obvious (to me and our True North Mortgage brokers) that getting your best, lowest rate (for which you qualify) is a great way to save thousands. If you're buying a new home and go straight to your bank, you'll likely pay a higher rate because they 'bank' on your loyalty rather than compete strongly on rates.

We can access several lenders to find your best rate (guaranteed), PLUS pass along a volume discount to get it even lower. We're known for having the best rates in the industry, and we work hard to achieve that for every client.

Our lowest advertised rates are for specific products, but no matter your situation or the complexity of details, we can suggest ways to save. Home-shopping soon? Rates are volatile — get a fast pre-approval and hold your rates now in case they change.

2. Switch to a lower rate or better product

Do you regret paying that higher mortgage rate with your big bank?

  • You can check with us any time, especially during your mortgage renewal period, to see if we can switch you to a better rate and more flexible mortgage
  • You may decide it's worth it to break your mortgage for a better rate or product (e.g., one that will get you ahead with better pre-payment privileges)
  • Is it time to choose a variable rate instead of a fixed rate? If you think that variable rates are on the way down during your term, each prime rate reduction (set into motion by Bank of Canada policy rate drops) can offer you some instant budget relief
  • Our low Rate Relief™ 6-month and 1-year products offer budget room while you wait for rates to decline (read here to see if this product is right for you)
  • Choose a shorter-term fixed rate, such as a 2- or 3-year rate, to renew into (hopefully) lower rates sooner

It's free, and there's no obligation to get our advice for your important rate decisions.

3. Save more with a conventional mortgage

Do you have money saved up for a holiday or a big purchase? Consider adding it to your down payment to increase it to at least 20% of the home price to make it a 'conventional' mortgage.

Not only will your mortgage size and monthly payments be reduced, but you may also be able to extend your loan length to 30 years for even lower payments (see more on this below). Also, you won't need the mortgage default insurance required on a high-ratio mortgage (that has less than 20% down).

The overall savings difference on a $500K home price with a down payment of 10% vs. 20% (standard 25-year amortization), is over $51K! A conventional mortgage typically comes with a higher rate (no insurance on the loan), but you'll still save more.

4. Extend your amortization to lower your payments

On a purchase. If you have a conventional mortgage (20% down or more), you may be eligible for a 30-year amortization. A high-ratio mortgage (less than 20% down) requires a standard 25-year amortization

On a new build for a first-time buyer. A break has been granted for this situation to allow a 30-year amortization on an insured mortgage (25 years is usually the standard).

On a renewal. If you've had your mortgage for a few years, you could extend your amortization back to your original time.

Or, if you initially had a high-ratio mortgage at a 25-year amortization and have paid down enough to bring your loan-to-value (LTV) to 80% or lower, you may now qualify for a 30-year amortization.

Extending your amortization means it'll take longer to pay off your mortgage (more interest paid, too), but it may be the 'immediate' monthly cash-flow help you need. This action may require a refinance, which could incur fees depending on the lender, but no penalties if done at renewal. You can catch up later if more funds become available.

5. Save on other debt

If you have other debt at higher interest rates, now might be a good time to refinance to consolidate your loans into one mortgage payment at a lower rate. It can help you save money on interest and allow more budget space. The catch, however, is not to run up those other loan sources again and focus on paying down your new mortgage.

  • Reduce the number of loans you're paying to just one mortgage
  • Your monthly mortgage payment will be higher, but you'll avoid being nickel-and-dimed by other payments
  • You could save thousands on interest costs and help free up cash flow
  • Need a second mortgage to keep your first mortgage rate intact? We may be able to help where big banks can't.

6. Pay a lump sum on your mortgage principal

Do you have some cash stashed? Think about spending it on your future (mortgage) self.

Investing in your mortgage with extra funds down on your principal can help you save thousands rather than spending your hard-earned savings on higher interest costs.

  • A lower principal amount means paying less interest
  • You could end up with a shorter amortization to pay off your mortgage faster — unless you recast your mortgage to get lower payments for budget relief now
  • Your extra principal payments could help buffer against future rate increases

7. Increase your mortgage payment frequency

If you have the budget room now, speed up those monthly payments to save thousands on interest and pay off your mortgage faster.

How much can you save by switching from monthly to bi-weekly accelerated payments? Let's take a $500K home price with a minimum 5% down payment (a high-ratio mortgage that requires default insurance) and pair it with a 5-year fixed rate of 5.0% (and standard 25-year amortization).

In your first 5 years, you can save over $2K, and over the life of your mortgage, you'll shave off about 3.5 years to save over $60K in interest.

8. Port your rate and mortgage to a new home

Many lenders and products include a portability feature, which can allow the option to move your rate and product from one property to another (depending on government restrictions and lender conditions).

So, if you plan to move, bringing your lower rate with you (or getting a blended one that's still lower) might help you budget for your new home.

9. Access first-time home buyer programs and rebates

I wish I could reach every potential first-time buyer and tell them to talk to us.

There's a reason that we get so many 5-star reviews. Our brokers are highly trained, with hours and hours put in on top of what each employee brings to the table in knowledge and experience.

We offer volume rate discounts, flexible mortgage options, savings on costs and fees — and targeted advice on programs and rebates to make their first mortgage a sound financial strategy.

And we've developed a best-ever First Time Home Buyer's Guide to help with the journey (including essential tips and worksheets) from beginning to end.

10. Co-live, to co-mortgage

To bring home affordability within reach, consider multigenerational or co-ownership of a larger home to share with family or friends.

You'll be able to pool your resources for a larger down payment and split other costs, including the monthly mortgage payment. Or, many are turning to rent-to-own setups to own a home and eventually end the renting cycle (but watch out for the fine print).

Especially in higher-priced regions, the right planning may help you get into home ownership — sooner than going it on your own.

11. Tap your home equity for lower-interest funds

With rising rates, your mortgage will still offer a much lower-interest way to borrow compared to the jacked-up rates you'll get with credit cards or private loans.

If you have equity in your home, we can help look into your refinance, a HELOC, or a second mortgage for extra funds for investment, home upgrades or schooling.

12. Skip a mortgage payment to pay off higher-interest debt that month

Some lenders allow good-credit clients to skip a mortgage payment for at least one month (restrictions may apply).

Using this option will 'defer' your mortgage principal for that same amount and will be added to your amortization length, which means you'll pay a little more interest over the lifetime of your mortgage.

However, the budget break may allow you to catch up elsewhere to save on interest and reduce debt obligations.

13. (Bonus Tip!) Watch out for mortgage traps that may cost you more

See an 'ultra-low' rate on the web? Our expert brokers can help you uncover the fine print to see if that bargain-bin rate comes with hefty restrictions or hidden fees that make up any savings difference you think you're getting.

Or, if you use a rate-comparison site, make sure you're okay with them selling your data to whatever third party they want (it's actually their business model to sell your info).

We always say that your best rate is important, but so is having a flexible mortgage product and transparent advice to go with it.

Your mortgage should work with you and your financial goals — not against you. If you think you'll need a change or want certain pre-payment options, the right mortgage fit matters to save money on penalties or other costs you didn't see coming.

We'll help you chase down your mortgage savings.

We're highly trained to help each client with the right strategy that works for them, to save the most on their mortgage.

I started at True North Mortgage as a broker and loved working here and helping clients get a better mortgage. Now, as Director of Operations, I help ensure our service continues to go above and beyond for our clients' mortgage needs, especially during times of challenge and change.

Have questions about your mortgage? We can zero-in on savings for your situation, and we're standing by to help. Give us a call or drop by a store location!

Chirag Mehta
TNM Director of Operations

Chirag champions an exceptional mortgage experience behind the scenes, working to ensure integrity and transparency in support of our brokers and clients.

Many ways to save, with an easy, stress-free process.