Mortgage Resources

Library

Want to Cut Years off your Mortgage?

Asking a home owner if they want to cut years off their mortgage seems like a silly question, but in reality many Canadians are not taking a simple step that could do just that. Most people accept the standard mortgage terms where you make a monthly payment over 25 years. Most banks and lenders prefer home buyers to pay their mortgage this way because it means more money for the bank or lender, but did you know that you can change your payment frequency to save you money over the life of your loan?

You can pay your mortgage every two weeks or even every week. By increasing your payment frequency, you can potentially save thousands of dollars and cut years off of your amortization schedule. Many banks and lenders offer accelerated payment schedules, but it is up to you to ask for more information. Our qualified professional mortgage brokers at CanEquity Mortgage can answer any questions that you might have about increasing your payment frequency. Our brokers will also inform you of this option when helping you find the best mortgage option to suit your individual needs.

How does increasing my payment frequency actually cut years off my mortgage?

The concept is quite simple actually. When you borrow money, you are charged interest or even a yearly charge for borrowing the money. The interest is added to the original loan amount or principal loan amount and over time the interest can add up. By increasing your payment frequency, you are paying off more of the original loan amount and you incur less interest over time which saves you money and we all want to save money!

If you want to see for yourself the difference that increasing your payment frequency can make, simply use our mortgage calculator to view various payment scenarios. If you prefer to speak to a mortgage broker directly, give us a call at CanEquity today.