Pay Your Mortgage Off Faster

Flex your mortgage options to save more.

Does your mortgage bend a little or a lot? You likely have some pre-payment privileges on your closed mortgage term, regardless of whether you have a variable or fixed rate product.

That's good news — as it will allow you to increase your payments or plunk more down on your mortgage principal to get ahead of interest costs and pay your mortgage off faster.

What pre-payment options can help you pay down your mortgage?

• Increase your regular payment amount
• Double up a payment, or add more to a payment when you can
• Put down a lump sum every year
• Change your payment frequency

Some mortgage products may allow as much as '20/20' to be put down against your principal each year. That means you can increase your regular payment by up to 20% AND apply annual lump sum payments of up to 20% of your original mortgage amount.

These amounts go directly to your principal, shortening your amortization (length of mortgage) and potentially saving you a pile of cash over the life of your loan.

Here's an example of increasing your payments by 20%

Let's take the 20/20 pre-payment privilege example, and apply it to a $450,000 mortgage loan:

• A $450,000 closed mortgage amortized over 25 years at a fixed rate of 2.44%
• Lender allows for a 20% increase in your regular payments
• With your regular payments of $2,002.43/month with no monthly increase, your remaining amortization after 5 years would be the usual 20 years
• Now increase your regular payments by 20% to $2,402.92/month
• Your remaining amortization after 5 years would be 14 years and 8 months, knocking off over 5 years of amortization!

If 20% is too much to squeeze out of your budget, a smaller increase or adding a bit more to a monthly payment here and there can shorten your amortization significantly over time.

Here's an example of using the 20% lump sum payments every year of your term

Using the 20% example above, on a $450,000 mortgage at a fixed rate of 2.44% with a 5-year term, you would have the option to put up to $90,000/year in lump sum payments on your mortgage. If this was the only option you took advantage of, you could pay off your mortgage in less than 5 years.

Of course, we may all dream of being able to do that — but it's not necessarily realistic. So, many lenders will allow you to apply lump sum payments in increments as low as $100 throughout the year, as long as you stay within that 20% (or whatever your lender allows).

Can you change your payment frequency?

Some lenders only allow a payment change once per year. Yet others, like our in-house lender, THINK Financial, allow payment changes more often if needed.

Choosing an accelerated payment schedule can reduce your mortgage to save you thousands.

Don't have a flexible mortgage?

Do you have a restricted mortgage or not enough options? We can help you uncover your mortgage fine print for what's available to you. If you need a different mortgage product that lets you stretch a little, we know what's out there and which lender or product may be a better solution.

Don't forget to talk to us when it's time to renew. We may be able to help you find a better mortgage fit (and a better rate) to save thousands.

Get a help renewal reminder

'Mortgage free' certainly has a nice ring to it.

A little here and there can go a long way, and you may find that your efforts snowball your way to a 'mortgage-free' party sooner than you thought.

Talk to us! Our friendly, expert brokers can outline your options and provide the numbers for different payment scenarios to help you make clear decisions. We love to help you save and reach your financial goals — sooner!

Anywhere you are in Canada, we can help. Online, over the phone, at a store near you, or click our website chat.