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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.
Example: $350,000 Fixed-Rate Mortgage at 5.00%1
| Monthly payments and 25-year amortization | Effect of $35,000 principal payment | |
|---|---|---|
| Mortgage repaid (years) | 25 | 20 years, 8 months |
| Monthly Payment | $2,035.62 | $2,035.62 |
| Total interest cost2 | $260,684 | $188,205 |
| Interest savings2 | N/A | $72,479 |
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Legal Disclaimer1)
Calculated, semi-annually not in advance.
Legal Disclaimer2)
Over the life of the mortgage, assuming constant interest rate throughout amortization period.