🇨🇦 How to Save Thousands in Interest and Pay Off Your Mortgage Faster

Paying off your mortgage early doesn’t require a major lifestyle change—just a few smart strategies. By making small adjustments to how and when you make payments, you can save thousands in interest and become mortgage-free years sooner.

Here are some of the most effective ways Canadian homeowners can accelerate their mortgage payoff:

💡 1. Round Up Your Monthly Payments

One of the simplest ways to reduce your mortgage faster is to round up your payments. For example:

  • If your monthly mortgage payment is $734, round it up to $800.
  • That extra $66/month can save you over $48,000 in interest and shorten your mortgage by 7.5 years(based on a typical 25-year amortization).

💰 2. Use Your Tax Refund for a Lump-Sum Prepayment

Apply your annual tax refund directly to your mortgage principal. Even a one-time prepayment can make a big difference:

  • A $1,000 lump-sum payment on a $100,000 mortgage could save you over $8,600 in interest and reduce your amortization by more than a year.

Most Canadian lenders allow annual lump-sum prepayments of up to 15%–20% of the original mortgage amount without penalty. Check your mortgage terms to confirm.

📆 3. Switch to Accelerated Bi-Weekly Payments

Instead of making 12 monthly payments per year, switch to accelerated bi-weekly payments. This results in 26 payments per year, which is equivalent to making one extra monthly payment annually.

This strategy alone can shave up to 4 years off a 25-year mortgage and save you tens of thousands in interest.

🏠 4. Consider a Shorter Amortization Period

If your budget allows, opt for a 15- or 20-year amortization instead of the standard 25 or 30 years. While your monthly payments will be higher, you’ll pay significantly less interest over time.

For example:

  • A $100,000 mortgage at 5% over 25 years = ~$75,000 in interest
  • The same mortgage over 15 years = ~$42,000 in interest
    That’s a $33,000 savings—just by choosing a shorter term.

🔧 5. Make Extra Payments Whenever Possible

Even small, irregular payments—like work bonuses, gifts, or side income—can go a long way when applied directly to your principal. Every dollar reduces your interest and shortens your mortgage.

✅ Final Tips for Canadian Homeowners

  • Check your mortgage terms for prepayment privileges and penalties
  • Set up automatic payments to stay consistent
  • Review your mortgage annually to explore refinancing or better rates
  • Work with a mortgage broker to find the best options for your goals

Thinking of Buying or Selling in Durham Region?

Whether you're planning to buy your first home or upgrade to your dream property, James and Patrick Bryant at COMFLEX® Realty are here to help you make smart, financially sound decisions.

📧 Email: [email protected]
📞 Call or Text: 905-439-2033

Let’s make your mortgage work for you—and get you closer to financial freedom.