Are you currently a homeowner and are looking to pay off your loan quicker by making larger payments per month? Or maybe you would like to pay off your loan entirely? Well, if this is you, then you should consider different mortgage pre-payment options. These are options that allow you to make these payments to your loan without being penalised.
So, to help you get started, your local Oakville mortgage broker with Loewen Group Mortgages has explained what mortgage pre-payment options are available to you.
In Canada, there are two main pre-payment privileges that can help you achieve your goals of paying off your loan quicker. There is the monthly payment plan and the lump sum prepayment plan. With the monthly payment plan, this allows you to increase the amount you owe every month on your Oakville mortgage. You have no restrictions on the amount you can increase, whether you want to add a couple of hundred dollars to your bill or double your bill entirely, you have the option to do so with the monthly prepayment plan.
The other common type of prepayment privilege is the lump sum prepayment plan. This allows you to pay off your mortgage principal. The maximum percentage allowed is 25%, which means if you receive a 25% lump sum prepayment privilege, you can pay off your loan entirely in four years.
So, if you have recently come across a large sum of money or just received a pay increase at your job, then taking part in these pre-payment plans can help you spend that additional money to help pay off your mortgage, without being penalised and charged with fees. This gives you the opportunity to shorten your amortization period and pay less in interest over a shorter period of time.
If you would like to receive more information on different pre-payment plans for your Oakville mortgage, please contact the Loewen Group Mortgages team at 416-907-3173.