Pay Down Your Mortgage Faster

Zach Silverman | Jan 17, 2024

Being a home owner is excellent, having a huge mortgage isn’t. So, if you have a mortgage that you’re looking to get rid of as quickly as possible, here are four things you should consider doing.


Accelerated payment options


Many mortgages offer accelerated payment options. Instead of making monthly payments, consider switching to bi-weekly or weekly payments. This results in making more frequent payments over the course of a year, effectively adding up to an extra month's payment annually.


A traditional mortgage with monthly payments splits the amount owing annually into 12 equal payments. Accelerated biweekly is simply taking a regular monthly payment and dividing it in two, but instead of making 24 payments, you make 26. The extra two payments accelerate the paying down of your mortgage.


This strategy can significantly reduce the overall interest paid and shorten the life of your mortgage.



Increase or round up your mortgage payments


Chances are, depending on the terms of your existing mortgage, you can increase your regular mortgage payment by 10-25%. Alternatively, some lenders even offer the ability to double-up your mortgage payments.


Another option is to round up your regular mortgage payments to the nearest hundred dollars or even to the nearest fifty dollars.


These small adjustment scan help you pay off your mortgage faster without a significant impact on your budget. Over time, the extra amount accumulates, contributing to the reduction of the principal and, subsequently, the interest paid.



Make a lump-sum payment


Take advantage of the ability to make lump-sum payments. Many mortgages in Canada allow borrowers to make additional payments beyond the regular schedule. If you come into extra funds, such as a tax refund or work bonus, consider applying it directly to your mortgage principal. Reducing the principal amount can lead to substantial interest savings over the life of the loan. 


If you come into extra funds, such as a tax refund or work bonus, consider applying it directly to your mortgage principal. As this will lower your principal amount owing on the mortgage, it will reduce the amount of interest charged over the life of the mortgage.



Review your options regularly


As your mortgage payments debit from your bank account directly, it’s easy to put your mortgage on auto-pilot and not think twice about it until your term is up for renewal. Unfortunately, this removes you from the driver's seat and doesn’t allow you to make informed decisions about your mortgage or keep up to date with market conditions.


So let’s talk about an annual mortgage review. Working through an annual mortgage review with an independent mortgage professional is beneficial as there may be opportunities to refinance your mortgage and lower your overall cost of borrowing. By reviewing your mortgage at least once a year, you can be sure that you’ve always got the best mortgage for you!


Did you know that Silverman Mortgage Group offers free mortgage review health checks anytime? We check in regularly with our clients. If you are not currently a client, no problem simply go to this page anytime: https://www.silvermanmortgage.com/mortgage-review. There is no cost involved here, just a quick assessment and peace of mind!



Remember, before implementing any strategy to pay your mortgage faster, it's crucial to check with your mortgage lender to understand the terms and conditions of your specific mortgage agreement. Some mortgages may have prepayment penalties or restrictions, so it's essential to be aware of these factors to make informed decisions.


If you’ve got questions about your existing mortgage or want to compare your mortgage to options available today, please connect with our team at Silverman Mortgage Group anytime. It would be a pleasure to work with you.


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