In Canada, it is possible to repay a mortgage before its end of term, which is generally for 25 years. For example, if you repay your mortgage before the term ends, you will save interest and free up capital. You can then start living one of your life goals such as making an investment, fast forward to early retirement, travel, buy a new car, etc. To guide you in the right direction, here are three strategies to pay off your mortgage faster:

1. Increase the frequency of payments
The first strategy is to increase the frequency of payments for your mortgage. If your budget allows it, you can make mortgage payments on a weekly or bi-weekly basis. This is called accelerated weekly payments or accelerated every two weeks. With this strategy, you will have made more refunds than with monthly payments. You will see the difference after one year and especially at the end of your loan! Both options reduce your interest in paying for the duration of your mortgage. You could even lower the usual 25-year term of your loan to about 21 years.

2. Increase the amounts of the payments
You can repay more than the regular amount you expect to pay. For example, after having had a 4% salary increase or a bonus, you could add the equivalent of that sum to each payment. In this way, the capital to be repaid will drop more quickly without you having to change your financial habits! Again, this strategy can save you money on the long run.

3. Early redemption:
Mortgage lenders allow you to make additional refunds in addition to your regular payments. Some people then decide to make lump sum payments after they have received an inheritance, additional income or any other income. However, percentage limits or conditions may apply depending on your situation. It is therefore advisable to inquire with our mortgage brokers for further information. One thing is certain: this strategy will allow you to pay your mortgage faster!