Ontario Mortgage Renewal Tactics for Paying Off Your Mortgage Faster

TL;DR

1. Shorten the Amortization Period: This is the single biggest move. It cuts years and tens of thousands of dollars in interest.
2. Make a Lump-Sum Prepayment: Use your final prepayment privilege before renewal to instantly reduce your new principal.
3. Keep Your Payment Amount High: If you get a lower rate, keep paying the old, higher amount to accelerate your debt freedom.

The day your mortgage renewal letter arrives, you have a major opportunity. For savvy Ontario homeowners, renewal is not just about signing a new term; it’s the best time to reset your financial path and shave years off your mortgage.

To take full advantage of the options available to you, talk to a dedicated mortgage agent who can rate shop for your and find the mortgage that best fits your goals.

If you’re coming up for renewal in the next six months, you’re in the perfect position to put a strategic plan in place with a local mortgage agent. Here are the top strategies you need to use to pay off your mortgage faster.

Step 1: Your Pre-Renewal Checklist (The 6-Month Head Start)

Thinking about your renewal only after your bank’s letter arrives is a huge mistake. The real savings happen when you start planning 4 to 6 months before your maturity date. This time gives your mortgage agent the power to shop for the best rate and help you make smart financial decisions.

If you want a detailed roadmap, check out our resource on The Ultimate Guide to Mortgage Renewal in Ontario, but here are the key steps for faster payoff.

Use Your Prepayment Power

Most closed mortgages in Canada allow you to make a partial lump-sum payment each year (often 15% to 20% of the original principal) without penalty. The period just before your renewal—specifically, before your maturity date—is a crucial window.

If you have any unused prepayment allowance, use it! Putting a lump-sum payment toward your mortgage before you sign the new term means your next contract starts with a lower principal balance. Even a few thousand dollars now can save you significantly on interest over the next term.

Get a Rate Hold

Securing the best possible interest rate makes sure you’re paying off your mortgage as fast as possible. Why? Because a lower rate means more of your current payment goes directly to the principal, not to interest.

The smartest move is to shop around with a mortgage broker 120 days before your term ends. A broker can get you a rate hold from a lender that fits you best. Switching lenders is a power move that many don’t consider on renewal, and it doesn’t have to cost you anything.

But many competitive lenders only work through mortgage brokers. Give us a call so we can start looking for your best rate.

Step 2: The Biggest Lever—Reducing Your Amortization Period

Think of your amortization period as the total life span of your mortgage—the 25 or 30 years it will take to pay it all off.

The single most powerful way to pay off your mortgage faster at renewal is to tell your broker that you want to shorten this period.

For Example: Here’s the difference in mortgage payment and total interest paid between a 20 year amortization and 15 year amortization, assuming a $300,000 mortgage balance at 4% fixed interest for the remaining life of the mortgage.

	20-Year Mortgage	15-Year Mortgage	Comparison
Monthly Payment	$1,812.74	$2,214.12	$401.38 More
Total Interest Paid	$135,057.60	$98,531.60	$36,526.00 Saved

The Renewal Advantage: When you reduce your amortization at renewal, you do it without paying any penalties. If you tried to do this mid-term, you could face hefty charges.

Ready to crunch the numbers? Use our handy mortgage calculator to see exactly how much you can save in interest by shaving a few years off your amortization.

IMPORTANT NOTE: In the numbers above, and when you run numbers, we’re using one interest rate for the rest of the life of the mortgage. But you will go through at least 2 or 3 more renewals before your mortgage is paid off. This means you will have at least 2 or 3 different interest rates before the end of your mortgage. So reality will not mirror your calculations right now. This is simply to illustrate the power of reducing amortization.

Step 3: Pay Your Mortgage Off Faster with Smart Payment Strategies in Your New Term

Once the new mortgage contract is signed, the race continues. You can use simple, automated strategies that continuously chip away at your principal.

Accelerated Payment Frequency

This is a classic strategy because it works so well. Here’s the difference:

• Bi-Weekly Payments: Your total annual interest and principal repayment divided into 26 payments.
• Accelerated Bi-Weekly Payments: Your total annual interest and principal repayment divided into 24 payments. This payment is slightly larger than the bi-weekly payment. But, you still make 26 payments.
  • Basically, you just increase your bi-weekly payment, paying off the principal faster. Accelerated bi-weekly payments are equivalent to makin an extra monthly payment each year.

Keeping Your Payments the Same (The Secret Strategy)

Sometimes, you renew and get a lower interest rate. When this happens, your lender will automatically calculate a new, lower required monthly payment.

The faster-payoff secret: Choose to keep your payments the same as they were in your previous, higher-rate term.

Since the interest cost is lower, the extra money from your “old” payment amount is applied directly to the principal.

• Example: Your payment used to be $1,800. Your new, lower-rate payment is $1,600. Keep paying $1,800. That extra $200 is applied directly to the principal every single month.

This strategy requires no adjustment to your budget but supercharges your mortgage paydown.

Thinking about your rate choice? Make sure you review the pros and cons of fixed vs variable rates for your mortgage renewal before you sign.

Step 4: Choose the Right Mortgage Type for Your Payoff Goal

Your choice of mortgage type and the fine print on prepayment privileges are critical for a speedy payoff.

While open mortgages give you total freedom to pay off the entire balance anytime without penalty, they come with a significantly higher interest rate. If your goal is fastest payoff, the most cost-effective path is usually a low-rate closed mortgage with generous prepayment privileges (e.g., 20% annual lump-sum allowance and 100% payment increase).

Make sure you read and understand the prepayment terms in your new contract. This is how you continue to make penalty-free prepayments throughout your new term.

Ready to Crush Your Mortgage? Talk to an Ontario Expert.

The time around your mortgage renewal is when you need expert advice the most. You have several options—from changing your amortization to making a lumpsum payment—and the path you choose depends entirely on your personal goals and cash flow.

Navigating these choices is especially difficult if you’re self employed in North Bay, Ontario. Lenders treat business owners differently than salaried or hourly workers.

We are your dedicated mortgage agents. Let us help you pick through the weeds of renewal and make sure you are best set up to pay off your mortgage faster.

It all starts with a conversation. Book a call, pick a time and date the works for you.