Using a prepayment privilege could save you a lot of money over the life of your mortgage. Find out how it works in Canada.
A prepayment privilege, also called a prepayment option, allows you to make extra payments toward your mortgage without incurring a prepayment penalty.
Prepayment privileges vary between Canadian lenders. Options may include:
Most lenders limit how much you can prepay each year, unless you have an open mortgage. Open mortgages are more flexible, but they tend to have higher interest rates.
Example: “Amal paid off her mortgage three years early by exercising her prepayment privilege and paying an extra lump sum every year outside of her regular monthly payments.”
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