3 Ways to Pay Down Your Mortgage Today!

Diane Buchanan • July 6, 2016

Mortgages are funny things. When you’re buying a house, you can’t wait to hear these words: “Your mortgage has been approved”. But what that really means is that you are going to be a homeowner. And as discussed in the previous article, there is a lifestyle element of homeownership that is very attractive. But let’s not fool ourselves, a mortgage is debt; it’s money owed. When you sign mortgage documents, you are most likely taking on the most debt you will ever be responsible for.

The best kind of mortgage is one that is paid off as quickly as possible. So let’s go over three ways you can pay down your mortgage as quickly as possible. Because the very best mortgage is no mortgage at all!

Accelerate Your Payment Frequency

Sounds simple enough, but making the change from a monthly payment to an accelerated bi-weekly payment is one of the easiest ways to turbo-charge the repayment of your mortgage over a long period of time. Chances are you won’t even notice a difference.

Typically, on monthly payments, your mortgage is split into 12 equal payments. Accelerated bi-weekly payments divide your payments in half, but rather than 24 payments, you make 26. It’s the extra 2 payments that accelerate the repayment of your mortgage.

Increase Your Mortgage Payment

Unless you have a no-frills mortgage, which are popular with some banks, you should be able to increase your payment amount by 10–25% per payment! So if you get a raise at work, or happen to pay off a debt, consider rolling this newfound money directly into the prepayment of your mortgage.

Increasing your regular payment is a lot like signing up for a forced long-term savings plan. The extra money you put on your mortgage isn’t a prepayment of interest, but actually goes directly to the principal and lowers the amount of interest you pay over time.

The good thing about increasing your payment voluntarily is that if money gets tight in the future, you can always have your payment reduced to the original amount!

Making a Lump-sum Payment

As with the regular payment increase, when you make a lump-sum payment to your mortgage everything goes directly towards the principal balance. Most mortgage products allow you to put anywhere from 10–25% of the original mortgage amount as a lump-sum payment once per year.

The lump-sum payment option is perfect for any time you receive an unexpected amount of money and you aren’t exactly sure what to do with it, like an inheritance. If you receive a year-end bonus, make a habit of applying it to your mortgage. You could take years off your amortization! 

Not sure where to spend your tax return? Well, you should probably consider taking a nice warm vacation this winter. We live in Canada, and its cold here, although you might not remember that right now, because it’s July and it’s gorgeous outside. (You thought I was going to suggest you make a lump-sum payment on your mortgage? Well, you can do that too if you like, but a warm vacation is a lot more fun!)

There you have it, it’s a collection of the small things you can do today that will help you be mortgage free tomorrow. 

This article was originally published in the July 2016 Dominion Lending Centres Newsletter.

DIANE BUCHANAN
 Mortgage Broker

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RRSP As A Downpayment

By Diane Buchanan • July 16, 2025
Did you know there’s a program that allows you to use your RRSP to help come up with your downpayment to buy a home? It’s called the Home Buyer’s Plan (or HBP for short), and it’s made possible by the government of Canada. While the program is pretty straightforward, there are a few things you need to know. Your first home (with some exceptions) To qualify, you need to be buying your first home. However, when you look into the fine print, you find that technically, you must not have owned a home in the last four years or have lived in a house that your spouse owned in the previous four years. Another exception is for those with a disability or those helping someone with a disability. In this case, you can withdraw from an RRSP for a home purchase at any time. You have to pay back the RRSP You have 15 years to pay back the RRSP, and you start the second year after the withdrawal. While you won’t pay any tax on this particular withdrawal, it does come with some conditions. You’ll have to pay back the total amount you withdrew over 15 years. The CRA will send you an HBP Statement of Account every year to advise how much you owe the RRSP that year. Your repayments will not count as contributions as you’ve already received the tax break from those funds. Access to funds The funds you withdraw from the RRSP must have been there for at least 90 days. You can still technically withdraw the money from your RRSP and use it for your down-payment, but it won’t be tax-deductible and won’t be part of the HBP. You can access up to $35,000 individually or $70,00 per couple through the HBP. Please connect anytime if you’d like to know more about the HBP and how it could work for you as you plan your downpayment. It would be a pleasure to work with you.

Selling Your Property? Let's Talk

By Diane Buchanan • July 9, 2025
If you’ve been thinking about selling your existing property, for whatever reason, it would be in your best interest to connect with an independent mortgage professional before calling your real estate agent or listing it yourself. And while talking with your mortgage professional might not sound like the most logical place to start, here are a few scenarios that explain why it makes the most sense. If you’re buying a new property If you’re selling your property, chances are, you’ll have to move somewhere! So, if you plan on buying a new property using the equity from the sale of your existing property, chances are you’ll need a new mortgage. Don’t assume that just because you’ve secured mortgage financing before, that you’ll qualify again. Mortgage rules are constantly changing; make sure you have a pre-approval in place before you list your property. Also, by connecting with a mortgage professional first, you can look into your existing mortgage terms. You might be able to port your mortgage instead of getting a new one, which could save you some money. If you’re not buying a new property Even if you aren’t buying a new property and want to sell your existing property, it’s still a good idea to connect with a mortgage professional first, as we can look at the cost of breaking your mortgage together. Unless you have an open mortgage, or a line of credit, there will be a penalty to break your mortgage. The goal is to work on a plan to minimize your penalty. Because of how mortgage penalties work, sometimes it’s just a matter of waiting a few months to save thousands. You'll never know unless you take a look at the details. Marital breakdown The simple truth is that marriages break down. When that happens, often, people want closure, and unfortunately, they make decisions without really thinking them through or seeing the full picture. So, instead of simply selling the family home because that feels like the only option, please know that special programs exist that allow one party to buy out the former spouse. The key here is to have a legal separation agreement is in place. If you’d like to discuss the sale of your property and your plans for the future, connect anytime. It would be a pleasure to work with you!