This results in you paying for the equivalent of 13 months of monthly mortgage payments every year. In other words, you’ll be paying every two weeks, at an amount that is slightly higher than what a normal bi-weekly payment would be. With an accelerated mortgage payment, you make a payment more frequently than the traditional monthly payment, but your payment is still based on the regular monthly amount.įor example, the payment amount for accelerated bi-weekly would be what the monthly payment amount would be, divided by 2, and paid 26 times each year. In Canada, the two main accelerated mortgage payment frequencies are accelerated bi-weekly and accelerated weekly. This means that increasing it will permanently affect your future payments, and it might not be possible to decrease it in the future. Some lenders might only allow you to increase your regular mortgage payment amount. Instead, it will still be $1,500, unless you decide to make another extra payment. For example, if you double up your RBC mortgage payment from $1,500 to $3,000, you’re not required to make a $3,000 mortgage payment the next month. In most cases, the “increase your mortgage” feature does not affect your original mortgage payment amount. Going over this limit will cause mortgage penalties to apply. You can, however, make a one-time prepayment by using your annual 10% prepayment allowance. You can’t make an extra mortgage payment of over $1,500 in a given month, even if you didn’t make an extra payment the previous month. In other words, if your monthly mortgage payment is $1,500 with RBC, then you can make an extra payment of between $100 to $1,500 every month. You can also 'Double Up' your regular mortgage payment, which allows you to prepay between $100 up to your regular mortgage payment amount, with this amount going directly against your mortgage's principal balance. For example, RBC allows you to make extra payments, as a mortgage prepayment, equal to 10% of your original mortgage principal amount every year. By accelerating your payments, you make the equivalent of one extra monthly payment per year.įind out more about mortgage payment frequency.Not all lenders allow you to make extra mortgage payments, and they may also limit the amount of extra payments that you can make each year. With this option, you’re putting more money toward your mortgage than with a monthly payment.Īccelerated payments can save you money on interest charges. Choose an accelerated option for your mortgage paymentsĪn accelerated payment option lets you make weekly or biweekly payments. If you decide to keep your regular payments the same, you can pay off your mortgage faster.įind out more about the early renewal option. When your interest rate is lower, you have the option to reduce the amount of your regular payments. They do so because your old interest rate and the new term’s interest rate are blended.

Lenders call this early renewal option the blend-and-extend option. Some mortgage lenders may allow you to extend the length of your mortgage before the end of your term. When you renew your mortgage, you may be able to get a lower interest rate. Keep your payments the same when changing your mortgage Make sure you understand the details about penalties.įind out ways to reduce prepayment penalties. If you put more money toward your mortgage than the maximum amount allows, you will pay a prepayment penalty. Use the Mortgage Calculator to explore your payment options. on certain dates set out in your contract.Check your mortgage contract for the specific amount. You may only be able to put a limited amount of money toward your mortgage. You can make a lump-sum payment on top of your regular mortgage payments. The term can range from a few months to 5 years or longer. The term is the time that your mortgage contract is in effect including your interest rate and other conditions. Normally, once you increase your payments, you can’t lower them until the end of the term. If you increase your payments by more than your prepayment privilege allows, you may have to pay a penalty. You may only be able to increase your payments by a certain amount each year. Increasing the amount of your payments, even by a small amount, helps you pay off your mortgage faster. Check your mortgage contract or contact your lender to find out about your prepayment options. Your lender calls this a prepayment or prepayment privilege. increase the amount of your regular payments.To pay off your mortgage faster, consider putting extra money toward your mortgage.

Lump sum payment mortgage calculator