How Can They Pay Down Their Mortgage Faster?

|
How can they pay down their mortgage faster 700x450X THUMBNAIL

Published: January 14, 2013 • Last updated: January 7, 2021 at 0:49 am

Want to pay your mortgage down faster? You can, but here’s what you need to know

Dear Ross, we have a quick question about paying back the mortgage. I know for a closed mortgage you’re penalized if you pay it back before the end of the term, but I know there is a certain allowable amount you can prepay per year. Can you tell me what that is?

I think my previous research had shown me you can opt to increase your monthly payments or make random lump sums. We won’t be planning on making major lump sums for repayment but I was just curious to plan for how quickly we can attempt to pay it off. Thanks.

-T.A., Markham.

prepay mortgage

The lenders I deal with you can increase your monthly payments up to 15% of the initial payment. You can also make one lump sum payment of up to 15% of the initial mortgage amount once per year.

There are still a few mortgage lenders you can actually prepay 20% per year, and some of the “no frills” low rate mortgages out there are very restricted – like only prepay if you sell, not refinance, and very limited, if any, prepayment privileges, but I have no plans to put you in one of those.

Related Articles

​Ross Taylor
One of Toronto/GTA's Most Trusted and Knowledgable Mortgage Agents

Ross Taylor is recognized by his peers as one of Canada's pre-eminent difficult mortgage specialists. His ASKROSS blog and column ​ in Canadian Mortgage Trends are focused on the intersection between mortgage financing and personal credit.

With unique dual certification as a licensed credit counselor and mortgage agent, Ross's insights are valued by mortgage professionals and homebuyers alike.

If you have questions about anything financial or mortgage-related, please contact [email protected]. Ross answers everyone personally.

​For more information, visit About Ross Taylor.