Paying a mortgage off early comes down to sending more money to the principal than the regular schedule requires. This page covers the ways to do that, what a closed mortgage lets you pay without a penalty, and a worked example of what each approach saves. For prepayment limits in detail, see mortgage prepayment privileges; for what happens after the last payment, see the mortgage discharge process. More guides are in the refinancing and home equity hub, and how long your mortgage takes to pay off on its regular schedule is shown year by year on the amortization calculator.
The ways to pay a mortgage off faster
The Financial Consumer Agency of Canada (FCAC) describes these options:
- Increase your regular payment. Your contract may let you raise the payment by a set amount each year. The FCAC notes that, normally, once you increase your payments you can’t lower them until the end of the term.
- Make lump-sum payments. A lump sum goes on top of your regular payments, up to the limit in your contract. Depending on the contract, it can be made at certain times during the term, on dates set out in the contract, or at the end of the term.
- Choose accelerated payments. Accelerated weekly or biweekly payments put more toward the mortgage than monthly payments; in the FCAC’s words, you make the equivalent of one extra monthly payment per year.
- Keep your payment the same at renewal. If you renew at a lower rate, you can keep paying the old amount, so you pay the mortgage off faster.
- Choose a shorter amortization. A shorter amortization means a higher payment and less interest overall; the example below shows the trade-off.
Your lender calls the first two a prepayment or prepayment privilege. Paying more than the privilege allows can cost a prepayment penalty (see how mortgage penalties are calculated).
Accelerated vs regular payment schedules
The FCAC gives these formulas for each payment frequency:
| Schedule | Payment | Payments a year |
|---|---|---|
| Monthly | The monthly payment | 12 |
| Biweekly | Monthly payment × 12 ÷ 26 | 26 |
| Accelerated biweekly | Monthly payment ÷ 2 | 26 |
| Weekly | Monthly payment × 12 ÷ 52 | 52 |
| Accelerated weekly | Monthly payment ÷ 4 | 52 |
Regular biweekly and weekly payments add up to the same yearly amount as monthly payments. The accelerated versions don’t: half the monthly payment, paid 26 times, comes to 13 monthly payments a year instead of 12.
What lenders allow without a penalty
Prepayment limits are set by each lender and product. Two examples from the banks’ own pages, as of October 1, 2026:
- RBC Royal Bank, closed mortgage: up to 10% of the original principal amount of your mortgage once in every 12-month period.
- TD, lump sums: up to 15% of the original principal amount on your mortgage once a year, without charge. Payment increases: “Regular payments can be increased by up to 100% over the term without charge once per calendar year.”
The prepayment privileges guide compares more lenders and explains how the limits work. Your own limit is in your mortgage contract: a federally regulated lender, such as a bank, has to show the prepayment privileges in an information box at the beginning of the agreement.
How much each approach saves: a worked example
Hypothetical mortgage: $500,000 borrowed at a fixed 4.5% with a 25-year amortization, with the rate compounded half-yearly (the Interest Act requires a mortgage to state its rate calculated yearly or half-yearly, not in advance). The monthly rate is (1 + 4.5% ÷ 2)^(1/6) − 1, so the regular payment is $2,767 a month and the interest over 25 years totals $330,209.
| Approach | Payment | Paid off in | Total interest | Interest saved |
|---|---|---|---|---|
| Monthly payments (baseline) | $2,767 a month | 25 years | $330,209 | none |
| Accelerated biweekly | $1,384 every 2 weeks | 21.7 years | $280,131 | $50,078 |
| Monthly payment raised 10% | $3,044 a month | 21.2 years | $273,452 | $56,758 |
| $10,000 lump sum each year | $2,767 a month plus $10,000 a year | 16.4 years | $205,983 | $124,226 |
| 20-year amortization | $3,152 a month | 20 years | $256,486 | $73,723 |
How the figures are calculated. For a payment A per period, a rate i per period and a $500,000 balance, the number of payments needed to reach zero is log(A ÷ (A − 500,000 × i)) ÷ log(1 + i), and the total interest is the number of payments × A − $500,000.
- Accelerated biweekly: A is the monthly payment ÷ 2, and i is (1 + 4.5% ÷ 2)^(1/13) − 1, because 26 payments a year are 13 per half-year. The number of payments is divided by 26 to give years.
- Payment raised 10%: A is the monthly payment × 1.1 from the first month.
- Lump sum: each $10,000 is treated as twelve monthly amounts that grow to $10,000 by the end of the year, $10,000 × i ÷ ((1 + i)^12 − 1) a month, added to A. That leaves the same balance at the end of every year as a single payment on the anniversary; only the last, partial year differs slightly.
- 20-year amortization: the standard payment formula with 240 monthly payments.
These illustrate one hypothetical mortgage and aren’t a forecast: a real mortgage’s rate changes at each renewal, and a lump sum can’t exceed the privilege in the contract.
The earlier an extra dollar goes to principal, the more interest it saves, because it stops accruing interest for every remaining month of the amortization.
What to weigh before prepaying
Penalties beyond your privileges. If you put more toward a closed mortgage than its privilege allows, or pay it off before the term ends, you normally pay a prepayment penalty. The FCAC suggests making full use of your privileges each year, so any future penalty is based on a lower balance, and considering waiting until the end of the term to prepay if the penalty would be large. Whether breaking a mortgage is worth it is covered in should you break your mortgage for a lower rate.
Other debts. Each dollar of prepayment saves interest at the mortgage rate. A debt that charges a higher rate, such as a credit card balance, costs more per dollar owed, so paying it down first saves more interest.
Investing instead. The borrowed money has to be used to earn income from a business or property, such as rent, interest or dividends; interest on money used for personal purposes isn't deductible. A mortgage on the home you live in is a personal-use borrowing, so a prepayment saves interest at the full mortgage rate, with no tax on the saving. For investing to come out ahead, the investment’s return after tax has to beat that rate, and investment returns aren’t guaranteed. Money in a TFSA grows without tax; see TFSA vs paying down your mortgage for the comparison.
Access to the money. Once money is paid into the mortgage, getting it back means borrowing against the home, for example with a home equity line of credit (see HELOC vs refinance), which you have to qualify for.
When the mortgage is paid off
Paying the last dollar doesn’t remove the lender’s charge from your title by itself; the mortgage discharge process explains the steps.
Related resources
Sources
The figures and rules on this page come from these sources, last checked against them between October 1, 2026 and October 2, 2026. How we check facts.
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Data table
- Canada Revenue Agency: Line 22100 – Carrying charges, interest expenses and other expenses
- Canada Revenue Agency: Income Tax Folio S3-F6-C1, Interest Deductibility
- Financial Consumer Agency of Canada: Paying off your mortgage faster
- Financial Consumer Agency of Canada: Choosing a mortgage that is right for you
- Justice Laws (Canada): Interest Act
- RBC: Making a Mortgage Prepayment - RBC Royal Bank
- TD: TD Mortgages & Rates - TD Canada Trust