How to Pay Your Mortgage off Faster
Most mortgages have prepayment privileges so you can pay them off faster. These prepayment privileges can be different for each lender, but they are often very similar from one lender to the next.
Here is an example of pre-payment privileges you can expect to have with your mortgage:
- Annual 15% lump sum: Every year you can pay up to 15% of your original mortgage balance on any regular payment date. The payment applies directly to your principal. Minimum prepayment amount is $100.
- Annual 15% payment increase: Once per year you can increase your payment amount by up to 15%. The payment applies directly to your principal. Not available for adjustable rate customers.
- Double up: You can double up your payment of principal and interest on any regular payment date. The payment applies directly to your principal.
If you pay off an amount that exceeds your allowable prepayment privileges then you will be subject to a prepayment charge based on the amount.
If you need to pay off the entire mortgage early then you will need to pay a penalty to break the mortgage.