An extra payment can affect your mortgage balance, but the contract determines how much you can pay and when. Confirm the rules for your specific mortgage first.
1. Locate the contract provisions
Find the section describing lump sums and payment increases. Ask the lender to explain the applicable limit, calculation basis, permitted dates and whether unused room carries forward. Do not substitute another lender’s advertised policy for your own terms.
2. Request confirmation for the amount you intend
Give the lender the proposed payment amount and date and ask whether a charge applies. Keep the response with your records. If you are selling or refinancing soon, ask how the proposed payment interacts with the payout calculation.
3. Keep the household reserve in view
Consider upcoming taxes, repairs and other commitments before putting accessible savings into the mortgage. Ask whether and how funds could be accessed later, rather than assuming the extra payment can simply be withdrawn.
Questions to bring to our conversation
- What amount can I pay on my intended date without a charge?
- Does unused prepayment room expire?
- How will this affect the balance or repayment schedule?
Further reading: FCAC: Prepayment penalties. General information; lender requirements and individual circumstances vary.