5 Proven Ways to Pay Off Your Mortgage Faster

For homeowners, paying off your mortgage faster is a significant financial goal. With a competitive housing market, many believe they are locked into decades of debt. But the truth is, a few smart strategies can shave years off your mortgage and save you a fortune in interest.

Here are five effective tips for homeowners to accelerate their journey to financial freedom.

1. Master Accelerated Payments: A Simple Way to Pay Your Mortgage Faster

This is one of the most powerful and simple changes you can make to your mortgage payment schedule. Instead of making one monthly payment, you can switch to an accelerated bi-weekly or weekly plan.

Here’s the simple math behind it:

• Standard Monthly Payments: You make 12 payments each year.

• Accelerated Bi-Weekly Payments: You make a payment every two weeks. There are 26 bi-weekly periods in a year, which is the equivalent of 13 regular monthly payments.

• Accelerated Weekly Payments: You make 52 payments a year, also the equivalent of 13 regular monthly payments.

That one extra payment per year goes directly towards your principal, dramatically reducing the total interest paid over the life of your mortgage. This strategy is a game changer for anyone serious about becoming mortgage free faster. You can also use our payment calculator by clicking here to see exactly how much faster you could pay off your mortgage.

2. Use Lump-Sum Payments to Shrink Your Principal

Receiving a financial windfall like an annual bonus, a tax refund, or an inheritance? Putting that money directly towards your mortgage is one of the smartest financial moves you can make. Most Canadian mortgage products allow for an annual lump-sum payment without penalty.

Check your specific mortgage agreement, but you can typically contribute up to 15% to 20% of your original mortgage amount each year. This one-time payment is a powerful tool to make a massive dent in your principal and significantly reduce your long-term interest costs.

3. The Simple Trick of Rounding Up Your Mortgage Payments

This strategy proves that small, consistent actions lead to big results. If your mortgage payment is an irregular amount, say $1,875, simply round it up to a nice, even number like $2,000. That extra $125 each month adds up to an additional $1,500 over a year.

By automatically contributing a little extra with each payment, you’re constantly chipping away at your debt without feeling a significant strain on your budget.

4. Increase Your Payments with a Flexible Mortgage

Many mortgages offer the flexibility to increase your regular payment amount by a certain percentage each year (often 10% to 20%). As your income grows or as you pay off other debts, this is an ideal opportunity to redirect those funds.

Even a small increase can have a huge impact over the years, helping you gain momentum and accelerate your journey to being mortgage-free.

5. Get Expert Help at Renewal: Why a Mortgage Broker is Essential

When your mortgage term is up for renewal, simply accepting the offer from your current lender could be a costly mistake. This is the perfect time to optimize your mortgage, and working with a mortgage broker can be your biggest advantage.

Here's how a professional broker helps you at renewal:

• They Do the Shopping for You: As a Toronto mortgage broker, I have access to a vast network of lenders, from major banks to private lenders. I can quickly compare dozens of products to find the best possible rate and terms for your specific needs.

• They Are Your Expert Negotiator: Brokers have in-depth market knowledge and can often secure a more competitive rate than you could on your own. My job is to leverage industry relationships to get you the best deal.

• They Provide Personalized Advice: Your financial situation is unique. I can assess your current goals whether it’s to pay off debt faster, consolidate loans, or save for a major renovation and recommend the right mortgage product with the features that will help you achieve them.

By letting a professional navigate the renewal process, you can ensure you’re not leaving money on the table.

Ready to Accelerate Your Mortgage Payoff?

Paying off your mortgage in the GTA may seem daunting, but by implementing these strategies, you can take control of your financial future. Whether it's through accelerated payments or a strategic renewal, every step gets you closer to the incredible feeling of being a mortgage-free homeowner.

Want to learn more about how a personalized mortgage strategy can help you? Contact us today for a free, no-obligation consultation. We'll review your current mortgage and help you build a plan to become mortgage-free faster.