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A great way to save on interest costs and reduce the life of your mortgage is by making annual principal payments.

  • If you choose a closed mortgage, you may prepay up to 10% of the original principal amount of your mortgage once in every 12-month period. The prepayment is applied directly to the principal of your mortgage.
  • You may also Double Up your regular mortgage payments (of principal and interest).
  • You can make a principal prepayment of $500 or more to your open mortgage as often as you like!
  • Plus, you can make principal prepayments of any amount you wish on your mortgage principal at renewal time.
  • A principal prepayment of $2,000 a year can make a substantial difference in the time it takes to pay off your mortgage. Take a look:
  • Example: $350,000 Fixed-Rate Mortgage at 2.5%1

      Monthly payments and 25-year amortization Effect of $35,000 principal payment
    Mortgage repaid (years) 25 21yrs, 9 months
    Monthly Payment $1,567.89 $1,567.89
    Total interest cost2 $120,364 $92,941
    Interest savings2 N/A $27,423

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