Looking for ways to pay off a mortgage faster? That’s a fantastic goal. Not having a mortgage hanging over your head brings peace of mind and it frees up a lot of money each month to save for retirement, travel, or future investments.
In Canada, where home prices and interest costs can add up quickly, getting rid of your mortgage sooner can save you tens of thousands of dollars. It also means you’re one step closer to true financial freedom.
Before you start, it’s a good idea to chat with a mortgage broker or financial advisor to make sure you’ve got your bases covered:
- Your high-interest debt (like credit cards or car loans) is paid off
- You’ve got an emergency fund (ideally 3–6 months of expenses)
- You’re contributing to your RRSPs or TFSAs
- You’re not neglecting any other big priorities, like kids’ education or retirement planning
Once that’s in place, you’re ready to start knocking down your mortgage. Let’s look at 10 ways to help you do it faster:
1. Make Extra Payments Whenever You Can To Pay Off A Mortgage Faster
Even one extra payment per year can make a huge difference. Let’s say your monthly mortgage is $2,000. Paying an extra $2,000 once a year could shave years off your amortization period and save you thousands in interest. If possible, consider throwing in an extra $100–$200 with your regular monthly payment. It adds up faster than you think.
Tip: Ask your lender to apply extra payments directly to your principal, not future payments.
2. Use Your Prepayment Privileges
Most Canadian mortgages come with prepayment privileges. That means you can pay a certain amount extra (usually 10–20% of your original loan) each year without penalties. You can also often increase your regular monthly payment by a certain percentage. Check the terms of your mortgage, you might be missing out on a big opportunity to get ahead.
Every lender is different, so if you’re not sure how it works, ask your mortgage broker to review your mortgage terms with you. They’ll help you avoid penalties and maximize your prepayment strategy.
3. Switch to Accelerated Payments
Instead of making monthly payments, ask your lender if you can switch to accelerated bi-weekly payments. You’ll still make the same payment amount, but you’ll make one extra full payment per year. That small change alone can shorten your mortgage by years. A financial advisor or mortgage professional can run the numbers and help you decide if this option fits your cash flow.
4. Use Lump Sum Payments Wisely to Pay Off A Mortgage Faster
Get a work bonus? Tax refund? Sold a car? Instead of spending it, consider putting it directly on your mortgage. Big chunks of money like this can seriously reduce your principal and save you thousands in interest. Your mortgage broker can help you plan when and how much to apply without triggering fees and make sure it aligns with your long-term financial goals.
5. Refinance—Or Pretend You Did
If mortgage rates have dropped and you’re in a position to refinance without penalties, doing so could save you a lot. Just be sure the savings outweigh the costs. A mortgage broker can run the numbers and look for alternate lenders if your current one is not offering you a better rate. Take my refinancing quiz to see if it’s a good move for you.
Not ready to refinance? That’s okay—pretend you did. Let’s say you were approved for a 2.5% rate, but you’re still paying 4.5%. Keep your current payments the same as if you had the higher rate. That difference will go toward your principal and help you pay it off faster.
6. Find Extra Room in Your Budget to Pay Off A Mortgage Faster
If money’s tight, look for ways to trim everyday spending:
- Eat at home more often
- Cancel subscriptions you don’t use
- Shop around for better rates on insurance, internet or cell phone plans
- Cut back on impulse buys
Even $100–$200 a month can make a difference. A financial advisor can help you create a budget that frees up extra cash to put toward your mortgage without sacrificing your other goals.
7. Put Your Raise Towards Your Mortgage
Got a raise or promotion? Congrats! But before upgrading your car or booking a big vacation, think about putting some (or all) of that extra income onto your mortgage. The more you pay now, the less you’ll pay later. A financial advisor can help you split your raise between your mortgage and other savings goals so you’re building wealth on all fronts.
8. Consider Downsizing to Reduce the Size of Your Mortgage
This isn’t for everyone, but if your home feels bigger than you need — or too expensive to maintain — downsizing can be a smart move. Selling your home, buying something smaller or in a less expensive area, and using the profit to pay off (or significantly reduce) your new mortgage can fast-track your way to being mortgage-free.
Downsizing is a big decision so talk to a mortgage broker and financial advisor to look at the long-term financial impact, including moving costs, real estate fees, and how it affects your retirement or lifestyle goals.
9. Avoid Lifestyle Creep to Pay Off Your Mortgage Early
The more we earn, the more we tend to spend. But if you’re serious about paying off your mortgage, resist the temptation to inflate your lifestyle every time your income increases. Keep your expenses consistent and use that extra income to crush your mortgage instead. A financial advisor can help you stay on track and make sure the money you’re saving is going to the right places.
10. Work With the Right Professionals
A mortgage broker can help you understand your mortgage terms, calculate the impact of extra payments, and explore options like refinancing or switching lenders. A financial advisor can help balance your mortgage goals with saving for retirement, investing, and protecting your financial future. As both a mortgage broker and financial advisor, I can help you find the right options to pay off your mortgage faster.
Are You Ready Pay Off A Mortgage Faster and Make It a Priority? Give Me a Call Today!
Paying off a mortgage early is a smart move that can lead to real financial freedom but it’s also a big commitment. Whether you’re making small changes or big ones, every step counts.
If you’re ready to get serious about paying off your mortgage faster, give me a call. As a mortgage broker and a financial advisor, I can help you understand your options and make sure your plan works with your overall financial picture.
Let’s set up a free consultation at 705-315-0516 or book online to get started. I’m here to answer all your questions and find the best ways for you to pay off your mortgage faster.