I want to pay down my mortgage faster
When you pay down your mortgage faster, you can reduce your total interest costs by thousands of dollars and be mortgage-free years before you had thought possible. At BMO, there are a number of ways to do it.
Prepayment Privileges
We all want to be mortgage-free faster. BMO has ways to help you. Our flexible prepayment options let you put extra cash towards your mortgage principal without incurring charges1. This can save you thousands of dollars on your mortgage. Here's how it works:
Increase your mortgage payments (principal and interest)
You can increase the amount of your mortgage payment once each calendar year by:
- 10% for a Low-Rate Fixed Closed Mortgage or
- 20% for any other type of closed mortgage
Make a lump-sum payment against your mortgage principal
In addition to increasing your mortgage payments, you can make a lump-sum prepayment (in $100 increments) each year without added charge.* The maximum prepayment per calendar year is:
- 10% of the original mortgage amount for a Low-Rate Fixed Closed Mortgage; or
- 20% of the original mortgage amount for any other kind of closed mortgage
*Some conditions apply.
Find out how much you can save with BMO’s Mortgage Prepayment Calculator.
Pay more frequently
By switching from monthly mortgage payments to an accelerated weekly or bi-weekly schedule, you can become mortgage-free sooner and save thousands.
Example: $250,000 mortgage @ 6% APR on a 5-year fixed term with different payment frequencies for a 25-year amortization*
| Payment Frequency | Monthly (1 payment/month) | Weekly (1 payment/week) | Accelerated Weekly (1/4 of monthly payment/week) |
|---|---|---|---|
| Payment | $1,599.52 | $367.16 | $399.88 |
| Total interest you pay | $229,863.58 | $228,934.65 | $185,351.00 |
| Interest saved | N/A | $928.93 | $44,512.58 |
* The Annual Percentage Rate (APR) is for a mortgage of $250,000 and a 25-year amortization. APR assumes no fee(s) will apply. If an appraisal is required, the appraisal fee would increase the APR. The interest for a fixed rate mortgage is calculated half yearly, not in advance. The rate shown is an example only and is not necessarily applicable to an actual mortgage. Assume same interest rate for entire amortization period. These results are based on the above example as well as a number of assumptions. While care is taken in the preparation of the illustration, no warranty can be made as to its accuracy or applicability for any particular case.
Increase your regular mortgage payment and shorten your amortization
You can choose to increase the amount of your regular mortgage payment (principal and interest) by up to 20% (10% if you have a Low-Rate Fixed Closed Mortgage) without added charge. You can do this once in every calendar year. Paying more each month shortens your amortization and can significantly reduce your interest costs over time.
Example: $250,000 mortgage at 6% interest on a fixed term with monthly payments1
| Amortization Period2 | Your Monthly Payment | Total Interest |
|---|---|---|
| 20 Years | $1,780.47 | $177,320.98 |
| 25 Years | $1,599.52 | $229,863.58 |
| 30 Years | $1,487.06 | $285,354.78 |
1Per annum, calculated half yearly, not in advance. The rate shown is an example only and is not necessarily applicable to an actual mortgage.
2Assume same interest rate for entire amortization period.
How we can help
If you’d like to explore how you can pay down your mortgage faster, we can help you explore your options, just visit your local branch.
| 5 Year Low Rate Mortgage (closed) |
% APR** |
| Prime Rate | % |
| Smart Saver | % |
