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Please refer to your mortgage documentation to determine features associated with your mortgage. What follows are examples for illustrative purposes only.

Pay Down Your Mortgage Faster

Several options may be available to you, based on the product selected. Some of which are making a lump sum prepayments, increasing regular mortgage payment amounts and making your payments more often by paying weekly or bi-weekly.

Increasing Your Monthly Payments

When you establish or renew your mortgage, you can increase the amount of your mortgage payments to shorten your amortization period. You'll be surprised to see how much faster you can pay off your mortgage. And the shorter pay-off period can save you thousands of dollars in interest over the life of your mortgage! During the term of your mortgage, you may be anticipating an increased cash flow that you could use to pay down your mortgage. Once in each 12-month period, you can choose to increase the amount of your mortgage payments by as much as 20% of your current payment amount, and the increased payment amount goes directly toward reducing your principal. You continue these increased payments for the remainder of the term, unless you wish to increase them again after another 12 months.
Increasing a regular mortgage payment amount
(using $150,000.00 mortgage balance, 5 year term, @ 4.0% and $50.00 more is applied to each payment)
Payment FrequencyMonthlyAccelerated Weekly (pro-rated)Accelerated Bi-Weekly (pro-rated)
Principal & Interest Payment$789.03$197.26$394.52
Additional Principal payment$50.00$11.54$23.08
Interest paid over term$27,610.51$27,123.61$27,146.52
Principal paid$22,731.29$27,164.39$27,141.48
Closing Balance$127,268.71$122,835.61$122,858.52

Making Principal Prepayments

A great way to save on interest costs and reduce the life of your mortgage is by making annual principal payments. During the term of your mortgage, you may have additional cash that you could use to pay down your mortgage. During a 12-month period, you can choose to make a lump sum payment of up to a maximum of 20% of your original/renewed mortgage amount. This payment amount will go directly toward reducing your principal.
A principal prepayment of $10,000 a year can make a substantial difference in the amount of interest paid and the time it takes to pay off your mortgage. Take a look:

Making a lump sum prepayment
(using $150,000.00 mortgage balance, 5 year term, @ 4.0% and $10,000.00 is applied each year)
Payment FrequencyMonthlyAccelerated Weekly (pro-rated)Accelerated Bi-Weekly (pro-rated)
Principal & Interest Payment$789.03$197.26$394.52
Interest paid over term$21,526.20$21,043.72$21,065.24
Principal paid$75,815.60$80,243.88$80,222.36
Closing Balance$74,184.40$69,756.12$69,777.64

Accelerating Your Payment Schedule

You can save interest by increasing your mortgage payment frequency. When you select an accelerated weekly or bi-weekly payment option, you are essentially making the equivalent of one additional monthly payment each year which will help pay off your mortgage faster.

Changing a regular mortgage payment from Monthly to Weekly, or Bi-weekly (using $150,000.00 mortgage balance, 5 year term at 4.00%)
Payment FrequencyMonthlyAccelerated Weekly (pro-rated)Accelerated Bi-Weekly (pro-rated)
Principal & Interest Payment$789.03$197.26$394.52
Interest paid over term$27,922.70$27,440.06$27,461.74
Principal paid$19,419.10$23,847.54$23,825.86
Closing Balance$130,580.90$126,152.46$126,174.14