It’s simple. Just make early refunds for the duration of your loan, thus reducing interest costs and, at the same time, accelerating the repayment of your mortgage debt.
You can increase the amount of your payment (capital and interest); the supplementary payment applied directly to the capital will reduce the overall cost.
You can also choose weekly or bi-monthly payments instead of a monthly one, which will shorten your mortgage term by several years.
When you renew your mortgage, you can shorten the remainder of your mortgage loan term. Although the payments will increase slightly, the savings on interest will be considerable.
Here is an example:
At the end of a 5-year mortgage term a $175,00 25-year mortgage loan with 4% interest, if you shorten the repayment term by 3 years on the remaining 20 years to 17 years, you payments will increase by $106,50 monthly for a savings of $17,000 in interest!
So you can see from this example that mortgage loans can be quite complex, often making it very advantageous to seek out experienced advice from an expert… At Multi-Prêts, we have the expertise to assist and guide you.
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