Bid your mortgage goodbye

With today’s low mortgage rates, now is a good time to look at ways to pay off your mortgage more quickly.

Fixed versus variable savings, at a glance

With a base scenario of a $300,000, 25-year amortization, five-year fixed-rate mortgage at 3.45 per cent and a monthly payment of $1,496.23, if you:

– Pay $100 extra a month, interest saved: $15,744; paid off 2.3 years early

– Pay $300 extra a month, interest saved: $38,784; paid off 5.9 years early

– Double up on payments, interest saved: $94,175; paid off 15.1 years early

– Make a lump-sum payment each year of $45,000 (15 per cent of principal), interest saved: $145,585; paid off 19.9 years early

– Double up payments and pay 15 per cent of principal per year, interest saved: $131,570; paid off 21.3 years early.

With a base scenario of a $300,000, 25-year amortization, variable mortgage at prime -.70 (2.30 per cent) and a monthly payment of $1,314.20, if you:

– Pay $100 extra a month, interest saved: $9,408; paid off 2.3 years early

– Pay $300 extra a month, interest saved: $23,468; paid off 2.3 years early

– Double up on payments, interest saved: $55,597; paid off 14.3 years early

– Make a lump-sum payment each year of $45,000 (15 per cent of principal), interest saved: $78,147; paid off 19.9 years early

– Lump sum plus double-up, interest saved: $82,322; paid off 22.9 years early