Saving Money on Your Mortgage

At RBC Royal Bank, we offer a variety of options to help you save money on your mortgage:

	Save money on interest costs.
	Save money with prepayment options.
	Save money with the right amortization schedule.

Save money on interest costs.

Fixed or variable rate? That’s usually the first question to answer when choosing a mortgage. Which is the best choice for you?

• Variable rate mortgages generally will have the lowest rates of all mortgage rates available. Many experts agree that they offer the greatest opportunity for saving money on interest over the long term. With variable rate mortgages with a fixed payment amount, falling interest rates mean that more of your payment goes towards principal and less towards interest. This can save you months on your amortization period and thousands of dollars in interest costs over the life of your mortgage. But the reverse is true: in a rising interest rate environment, your mortgage interest rate will increase too. You’ll pay less against principal, more towards interest and thus add months to your amortization period.
• Fixed rate mortgages give you the peace of mind of knowing your interest rate is locked in for a specified period of time. You know exactly how much you’ll pay towards principal and interest each month, because your mortgage rate will not increase during the term you have selected.
• RBC Royal Bank also offers the RBC Homeline Plan™, which allows you to “split” your mortgage and enjoy the advantages of both fixed and variable rate mortgages.

For guidance, talk to an RBC mortgage specialist. He or she can help you weigh the pros and cons of different mortgages so you can make the choice that’s right for you.

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Save money with prepayment options.

With an RBC Royal Bank mortgage, you can save money over the long term by paying down your principal amount sooner. In general, there are four ways you can make extra payments to pay off your mortgage faster:

• Double-Up^® payments
• Lump sum payments
• Accelerated payment options
• Increase your mortgage payment

For more information about prepayment options, visit the Pay Down Your Mortgage Faster section of our Mortgage Centre.

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Save money with the right amortization schedule.

“Amortization Period” means the length of time you choose to pay off your mortgage. At RBC Royal Bank, you can choose an amortization period that best suits your needs:

• Choose a shorter amortization period and you’ll pay more per month, but less in interest costs over the life of your mortgage.
• Amortize the mortgage over a longer term and you’ll pay less each month, but more in interest over the life of the mortgage.

In the chart below, you can compare the total interest cost savings on an $80,000 mortgage amortized over 15 years versus the same mortgage amortized over 25 years.

25-Year vs. 15-Year Amortization ($80,000 Mortgage)

Try our Mortgage Payment Calculator to see even more scenarios.