When you establish or renew your RBC Royal Bank mortgage, you can increase the amount of your mortgage payments to shorten your amortization period.
You'll be surprised to see how much faster you can pay off your mortgage. And the shorter pay-off period can save you thousands of dollars in interest over the life of your mortgage!
During the term of your mortgage, you may be anticipating an increased cash flow that you could use to pay down your mortgage. Once in each 12-month period, you can choose to increase the amount of your mortgage payments by as much as 10%, without administration fees and the increased payment amount goes directly toward reducing your principal. You continue these increased payments for the remainder of the term, unless you wish to increase them again after another 12 months.
If mortgage rates drop, you can take advantage of the opportunities to reduce your amortization period at renewal time. You can simply go on making the same regular payments after you renew at a lower interest rate. Less of your payment will go toward interest, so you'll be paying off more of the principal — a truly painless way to save money!