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Becoming Debt Free Faster

A mortgage is a big commitment. Most mortgages are paid over 25 years but we have some tips to help you pay yours off faster. Reducing the number of years you make mortgage payments can add up to big savings!

There are several ways to "pay down" your mortgage and get out of debt faster:

Payment options1 How it works How you benefit2
1. Increase your payment when you arrange your mortgage, or any time during the term.

Try our Pay Your Mortgage Down Faster Calculator 		Increasing your payment by even a few dollars lets you pay down your principal faster. If you increased your mortgage payments by just $170 from $830 to $1,000, you could:
  • Save almost $48,000 in interest over the entire amortization period of your mortgage
  • Own your home about 8 years sooner
2. Make payments more frequently

Try our Pay Your Mortgage Down Faster Calculator 		Making payments more frequently saves you money in interest charges over the long run. And you'll pay down your principal faster. If you made bi-weekly payments of $415 instead of monthly payments of $830, you could:
  • Save almost $27,000 in interest over the entire amortization period of your mortgage
  • Own your home about 4.5 years sooner
3. Use your prepayment privilege and make a lump-sum payment. A lump-sum payment is applied directly to your outstanding principal if there is no outstanding interest owing. This saves you money over the course of your mortgage. If you made a $1,000 lump-sum payment:
  • Save almost $28,350 in interest over the entire amortization period of your mortgage
  • Own your home about 4 years sooner
4. Pay as much as you can at renewal. All CIBC Mortgages become open at renewal. This means you can pay as much as you want on your mortgage. If you chose 5-year, fixed-rate terms, and made a $10,000 lump-sum payment every time your mortgage came up for renewal, you would:
  • Save about $37,481 in interest over the entire amortization period of your mortgage
  • Own your home about 6 years sooner

You can access all of your mortgage details and information such as your Annual Statement through CIBC Online Banking. For information on how to register for CIBC Online Banking, call 1-866-525-8622.

1 Payment options are subject to the terms and conditions of your mortgage.

2 For illustration purposes only. Payment option scenarios assume a 5-year closed, fixed-rate mortgage of $120,000 with a 25-year amortization and a constant annual interest rate of 6.85% over the entire life of your mortgage, compounded semi-annually, monthly payments of $830 and assumes no additional payments. Actual rates will vary, which will affect your payment amount, your mortgage payout date and the amount you could save.


The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.