Interested in paying off your mortgage faster?
Did you know?
- You can choose accelerated weekly or biweekly payments to pay off your mortgage more quickly. For example, if you want to make an accelerated weekly payment, we would take your normal monthly payment and divide it by four. That would mean you would make 52 payments by the end of one year, which is equal to one extra month’s payment applied directly to your loan’s principal. This can take years off your mortgage and save you thousands!
- You can prepay up to 20% of your original mortgage amount annually and your payment (principal and interest) can be increased up to 20% once per calendar year
In the example below, by paying an additional $50 biweekly you can save $21,811.22 and take 6 years, 7 months off of your mortgage.
Prepayment PenaltiesOf course you can pay off your mortgage more quickly, but there are some prepayment penalties. These penalties will come into play if you prepay more than the allowable amount or pay off your closed mortgage before the end of the term.
You can find out more about the prepayment penalty in your mortgage agreement. It’s outlined in the prepayment clause. Here’s how it is calculated: the greater of three months’ interest or the interest rate differential.
Example1,2 - a residential mortgage with a current balance of $100,000 and a current interest rate of 5%.
Three Months Interest Calculation: outstanding mortgage balance x annual interest rate / 12 months x 3 months ($100,000 x 5.00%) / 12 months x 3 months = $1,250.00