Five tips to pay off your mortgage more quickly

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Buying a home is a major purchase that most people pay off over a long period of time. However, certain easily accessible choices can help you save on interest and pay off their mortgage in full more quickly. Here are five.

1. Increase the frequency of your payments

Many people think this is the easiest option to incorporate into a budget. Simply increase your payment frequency from monthly to weekly or biweekly. One excellent idea is to time your mortgage payments to coincide with when your salary is deposited.

By reducing the length of the payment period for the mortgage (amortization period), the principal will be paid off more quickly, and therefore interest will be paid on lesser amounts than had you continued to make monthly payments.

The following table shows the impact of different payment frequencies on a $200,000 hypothetical mortgage at 5% interest with an initial amortization period of 300 months (25 years)[1].

Payment amount Total amortization Interest paid Interest saved
Monthly payment

(12 times a year)

$1,163.21

25 years

$148,962.99

Accelerated biweekly payments:

(26 times a year)

$581.60

21 years and 6 months

$124,094.84

$24,868.15

Accelerated weekly payments

(52 times a year)

$290.80

21 years and 5 months

$123,822.54

$25,140.45

The above table shows calculated interest assuming that the rate does not change for the duration of the loan.

In this example, accelerated payments would save you approximately $25,000 in interest and shave close to 3 1/2 years off your amortization period!

2. Make an additional payment

If you get a raise, finish paying off a debt or gain other additional leeway in your budget, why not make an additional payment in addition to your regular one?

You are allowed to make an additional payment on principal each time you make a mortgage payment. This directly reduces the principal on your loan but cannot exceed the amount of your regular payment (principal and interest).

3. Increase the amount of your payments

If your budget has seen a major improvement, you can increase the amount of your mortgage payments by an amount up to the amount of the previous regular payment.

This can only be done once per calendar year and after the payment amount has been changed, the new amount must be retained for the remainder of the term. Naturally, when your term expires, you can return to the initial payment amount.

4. Make a lump-sum payment

If you’ve recently received an income tax refund, an inheritance, insurance benefits, lottery winnings or another substantial amount of money, why not seize the opportunity to make a lump-sum payment on your mortgage?

If your loan has a closed term, you can prepay up to 10% of the principal amount each calendar year at any time. Prepayment can be made in a single payment or spread out over the year[2].

When your term expires, you could reimburse any amount you wish before the beginning of a new term (renewal of the loan).

5. Opt for an All-In-One®

The All-In-One is a flexible financing solution that allows you to enjoy flexibility in the choice of frequency and amount of your payments[3].

The All-In-One offers you an interesting way to manage your finances. It allows you to use the value of your home and access repaid principal at any time to help carry out your projects without applying for additional credit.

You can therefore manage all your financing needs, bank accounts and short-term cash via a single solution. This multi-account concept allows you to have a complete overview of your financial situation while monitoring each of your projects separately.

Within your reach!

In summary, many simple ways are available to help you save money and pay off your mortgage faster.

For more information, feel free to contact our knowledgeable and helpful advisors at any time.


[1] The data in this example are assumptions only and do not create any legal or contractual obligation for National Bank.

[2] Accrued interest will be charged if the payment(s) are not made on the regular payment date.

® The National Bank All-In-One is a registered trademark of National Bank of Canada.

[3] Contact an advisor at a branch to know the conditions that apply to this product.

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