If you're like most Canadians, not many. According to Canada Mortgage and Housing Corporation (CMCH), "27 per cent of recent homebuyers have either made a lump sum payment or increased their regular payment." That leaves 73 per cent of y'all doing nothing to speed up your mortgage payoff!
The easiest of the pay-it-off-faster options is the accelerated payment plan. Instead of making the equivalent of 12 monthly payments, you make 13 with the extra payment going directly to your principal. It cost just a few dollars extra a week, but the impact over the life of your mortgage can be huge. On a $300,000 mortgage at 6.5 per cent over 25 years you'd save over $60,000 in interest just by choosing this option.
The option that sees the least action is the lump-sum anniversary prepayment. Most mortgages allow you to make an extra payment each year, which goes directly to the principal. But folks just never seem able to come up with the money. Hey, why don't you make an RRSP contribution this year and then take your tax refund and use that to make an extra payment against your mortgage?
3 easy ways to save on your mortgage
