RateReset Canada guide
How mortgage lump-sum payments work
Plan a Canadian mortgage lump sum around contract limits, timing, and liquidity.
Start with the privilege
Closed mortgages commonly permit a percentage of the original principal each year, but the percentage, eligible date, minimum amount, and carry-forward rules vary. Read the contract or ask the lender for written confirmation.
Why timing matters
Interest accrues on the outstanding principal. Reducing principal earlier means every later interest calculation starts from a smaller amount. The required payment may stay unchanged, shortening payoff instead.
Do not ignore liquidity
Mortgage principal is difficult to access without borrowing again. Compare the guaranteed interest avoided with emergency-fund needs, higher-cost debt, and the after-tax return of other uses of cash.
Estimates are for educational purposes and may differ from lender calculations, contractual terms, taxes, fees, or regulatory requirements. Read the full disclaimer.
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Methodology version: mortgage-methodology-2.0. See the editorial policy and corrections process.