10 Strategies to Pay Off Your Mortgage Faster
| Strategy | Difficulty | Impact | Time Saved |
|---|
| Accelerated biweekly | Easy | Medium | 3-4 years |
| Annual lump sum | Easy | High | 4-7 years |
| Increase payments | Easy | Medium | 2-4 years |
| Round up payments | Easy | Low | 1-2 years |
| Shorter amortization | Medium | High | Varies |
| Request rate reduction | Easy | Low | 0.5-1 years |
| Skip payment program | Easy | Medium | 1-2 years |
| Double-up payments | Medium | High | 4-6 years |
| Windfall strategy | Situational | High | Varies |
| Remortgage shorter | Medium | High | Varies |
Strategy 1: Accelerated Biweekly Payments
How It Works
| Payment Type | Payments/Year | Total Annually |
|---|
| Monthly | 12 | 12 × payment |
| Regular biweekly | 26 | Same as monthly |
| Accelerated biweekly | 26 | ~13 months |
Key: Accelerated biweekly = monthly ÷ 2, paid 26 times (not 24).
Impact
| $500,000 Mortgage at 5%, 25 Years | Monthly | Accelerated Biweekly |
|---|
| Payment | $2,923/month | $1,462/biweekly |
| Annual total | $35,076 | $38,000 |
| Extra paid | — | $2,924/year |
| Amortization | 25 years | 21.5 years |
| Interest saved | — | $65,000 |
Result: Mortgage-free 3.5 years early, save $65,000.
Strategy 2: Annual Lump Sum Payments
Prepayment Privileges by Lender
| Lender | Annual Lump Sum | When You Can Pay |
|---|
| BMO | 20% of original principal | Anytime |
| TD | 15% of original principal | Anytime |
| Scotiabank | 15% of original principal | Anytime |
| RBC | 10% of original principal | Once per year |
| CIBC | 10% of original principal | Once per year |
Impact of Lump Sum Payments
| Annual Lump Sum | Years Saved | Interest Saved |
|---|
| $5,000 | 3.5 years | $45,000 |
| $10,000 | 6 years | $78,000 |
| $20,000 | 9 years | $105,000 |
| $50,000 | 13 years | $138,000 |
$500,000 mortgage at 5%, 25-year amortization
Best Time to Pay
| Timing | Benefit |
|---|
| January 1 | Full year of interest savings |
| Anniversary date | Privilege resets |
| After big expense | Use remaining bonuses |
| Tax refund time | Put refund to work |
Strategy 3: Increase Regular Payments
Payment Increase Privileges
| Lender | Annual Increase Allowed |
|---|
| BMO | 20% |
| TD | 15% |
| Scotiabank | 15% |
| RBC | 10% |
| CIBC | 10% |
Impact of Payment Increases
| Increase | New Payment | Years Saved | Interest Saved |
|---|
| 10% | $3,215 | 2.5 years | $35,000 |
| 15% | $3,361 | 3.5 years | $48,000 |
| 20% | $3,508 | 4.5 years | $60,000 |
From $2,923 base payment on $500,000 mortgage
Strategy 4: Round Up Payments
Examples
| Original Payment | Rounded To | Extra/Month | Extra/Year |
|---|
| $2,923 | $3,000 | $77 | $924 |
| $2,685 | $2,700 | $15 | $180 |
| $1,462 (biweekly) | $1,500 | $38 | $988 |
Impact
| Extra | Years Saved | Interest Saved |
|---|
| $100/mo | 2 years | $25,000 |
| $200/mo | 3.5 years | $45,000 |
| $300/mo | 4.5 years | $58,000 |
Small amounts add up significantly over time.
Strategy 5: Choose Shorter Amortization at Renewal
At Renewal, Reduce Amortization
| Scenario | Monthly Payment | Interest Saved |
|---|
| Continue 20-year | $2,600 | — |
| Switch to 15-year | $3,100 | $40,000 |
| Switch to 10-year | $4,200 | $75,000 |
If your income increased, shrink your amortization.
Strategy 6: Ask for Rate Reduction
How to Negotiate
| Step | Action |
|---|
| 1 | Research current rates |
| 2 | Get quotes from competitors |
| 3 | Call your lender |
| 4 | Ask for rate match |
| 5 | Request loyalty discount |
Potential Savings
| Rate Reduction | Monthly Savings | Annual Savings |
|---|
| 0.10% | $25 | $300 |
| 0.25% | $62 | $750 |
| 0.50% | $125 | $1,500 |
Per $500,000 mortgage
Even 0.25% adds up to $3,750 over a 5-year term.
Strategy 7: Use “Skip” Wisely — Or Don’t Skip
Most lenders offer skip-a-payment programs. Instead:
| Strategy | Action |
|---|
| Instead of skipping | Make the payment anyway |
| If you were going to skip | Put that month toward lump sum |
| Benefit | Maintain payment discipline |
Strategy 8: Double-Up Payments
Some lenders allow you to double your payment occasionally.
| Lender | Double-Up Policy |
|---|
| RBC | Double up anytime |
| TD | Once per month |
| Others | Varies — check terms |
Impact
| Double-Ups/Year | Extra Paid | Years Saved |
|---|
| 2 | $5,846 | 4 years |
| 4 | $11,692 | 6 years |
| 6 | $17,538 | 8 years |
Strategy 9: Windfall Strategy
Put unexpected money toward mortgage:
| Source | Average Amount |
|---|
| Tax refund | $1,500-3,000 |
| Work bonus | $2,000-10,000 |
| Inheritance | Varies |
| Home sale equity | $50,000+ |
| Gift from family | Varies |
Rule: At least 50% of windfalls to mortgage.
Strategy 10: Refinance to Shorter Term
| Current | Refinance To | Monthly Increase |
|---|
| 25-year amortization | 15-year | ~35% higher |
| 20-year amortization | 15-year | ~18% higher |
When it makes sense:
- Rates dropped significantly
- Income increased
- Want forced discipline
Pay Off Mortgage vs Invest?
The Math
| Factor | Pay Mortgage | Invest in TFSA |
|---|
| Mortgage rate | 5% guaranteed return | — |
| Expected investment return | — | 7% average (not guaranteed) |
| Tax on gains | None | None (TFSA) |
| Risk | Zero | Market risk |
| Emotional benefit | High | Lower |
When to Prioritize Mortgage
| Situation | Why |
|---|
| High mortgage rate (6%+) | Guaranteed high return |
| Risk-averse | Peace of mind |
| Nearing retirement | Reduce fixed costs |
| Variable income | Lower payments = safer |
When to Prioritize Investing
| Situation | Why |
|---|
| Low mortgage rate (<4%) | Higher expected return elsewhere |
| Long time horizon | Can ride out volatility |
| Tax-advantaged room | TFSA/RRSP space available |
| Employer matching | Free money |
Balanced Approach
| Strategy | Split |
|---|
| Half to mortgage | 50% |
| Half to investments | 50% |
| Benefit | Diversified approach |
Summary: Maximum Impact Combo
| Combined Strategy | Per Year |
|---|
| Accelerated biweekly | +$2,900 extra |
| Annual lump sum ($10k) | +$10,000 extra |
| Payment increase (10%) | +$3,500 extra |
| Rounding up | +$1,000 extra |
| Total extra/year | ~$17,400 |
| Years saved | ~10-12 years |
| Interest saved | ~$150,000 |