How to pay off your mortgage faster?
Seeking ways to pay off your mortgage faster? Small steps accumulated over time can significantly reduce the duration it takes to own your home outright.
You'll often find chances to modify your mortgage to your advantage. Some adjustments can be made anytime during your term, while others are possible only upon renewal.
1. Actions you can take during your term:
Accelerate your payments: If your mortgage terms permit and you're on a monthly payment plan, consider switching to an accelerated schedule like semi-monthly, biweekly, or weekly payments. More frequent payments can lead to earlier principal reduction, potentially saving you a considerable sum in interest over your mortgage's lifespan.
Contribute a lump sum: Beyond regular payments, a lump sum contribution is a one-off payment towards your mortgage principal. Depending on your mortgage's conditions, you might allocate unexpected funds—like tax returns, work bonuses, or inheritances—towards your principal. Consulting with a mortgage advisor can guide you to a choice that aligns with your financial goals.
Raise your payment amount: You could also opt to increase the amount of your regular payments to hasten the repayment of your principal.
2. Steps to consider upon renewal:
Mind the timing: Certain financial institutions, TD included, allow you to renew your closed mortgage up to 120 days before the end of your term without incurring prepayment penalties. It's worth noting that you cannot switch from a closed to an open mortgage upon renewal.
Grasping the specifics of your mortgage contract is crucial before altering your payments. Engage with a mortgage advisor who can elucidate the flexible payment options available and assist in strategizing the most effective way forward.
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