The Lincolnberg Advantage

How to Pay Off Your Mortgage Faster

Whether you’ve been paying off your mortgage for 5 or 15 years, it’s better to find ways to pay it down faster than your original amortization period. The financial freedom of being mortgage-free can be achieved through various money-saving practices that are slow and steady, but can end up shaving years off of your mortgage.

Here are some helpful tips for paying off your mortgage faster, courtesy of Lincolnberg.

Cut Down on Monthly Expenses

This is easier said than done. We become so accustomed to buying our morning coffee or taking our loved ones out to weekly dinners that we forget—or ignore—the fact that these little expenses can add up. Just as you budget for your bills, you might want to consider budgeting for your other expenses. Some things are easy to cut back on and can also end up saving you tons of money that can be put toward your mortgage, such as:

• Drinking from a reusable water bottle
• Bringing coffee from home
• Preparing lunches for work
• Having more family dinners at home
pay down your mortgage faster

Other expenses may seem like a major sacrifice, so it’s up to you to decide how far you’re willing to go to save money. We don’t suggest eliminating all the little luxuries you enjoy—the point of paying off your mortgage faster isn’t to strip away all the activities that make life fun. But if you’re determined to shorten your amortization period, consider selling one of your cars if you have two, cancelling your monthly subscriptions (i.e. magazines, Netflix, etc.), and taking your vacations closer to home.

Make Do and Mend

Closely related to the previous point is the philosophy of “make do and mend,” which is another way of saying adopt a frugal lifestyle. Keep your winter boots for another year; grow your own kitchen herbs, repair ripped jeans, and take your bike to work. It’s easy to underestimate frugality because we have a harder time visualizing the financial results.

Trust us: it all adds up!

pay your mortgage down faster


You’ll soon notice more money sitting in your checking account at the end of the month; money you can put towards your mortgage!

Visit a Mortgage Specialist

Mortgage specialists don’t just help people buy a home. They also help them refinance their mortgage after their term is up. A mortgage specialist—most likely the same one you used to buy your home—can help you pay down your mortgage faster in two ways:

• Lower your interest rate
• Decrease your amortization period

how to save for mortgage

If you decide to shorten the length of your mortgage loan, you will have to pay higher monthly mortgage rates, but you could end up shaving years off your mortgage just by increasing your payments by a few hundred dollars every month, not to mention saving thousands of dollars on interest.

Pay Off Other Debts

The trick to paying off your debts as quickly as possible is to focus on the one with the highest interest rate. The average yearly interest rate of credit cards in Canada is 11.99%, but store credit cards can go up to 30%, not to mention they come with yearly fees. With some mortgages lower than 3% in Canada, it’s costing you more in the long run to hold onto credit card debt than it is to have a mortgage.

Pay off your credit cards, student loans, car loans, and lines of credit as soon as possible. Don’t stick with paying the minimums; your debt will drag on for years, causing you to pay hefty interest payments that could be used towards lowering your mortgage. We suggest focusing on these debts first before you pay extra on your monthly or bi-weekly mortgage fees.

Switch to Bi-Weekly Payments

In a calendar year, making bi-weekly payments equal to an extra mortgage payment is worth the switch. The best part is that switching is easy because you can schedule your bi-weekly loan payments to coincide with your paycheque.

Start Earning Extra Cash

Earning extra money doesn’t mean you have to get a second job. Whether you work full-time or part-time, you can start earning passive or secondary income by investing a little time and/or money on side ventures. If executed correctly, you could build yourself a profitable side business that not only increases your monthly mortgage payments, but also develops your personal interests and passions. Turn your hobby into a business, become an Uber driver, or start a blog.

Pay a Little Extra Whenever You Can

You get a Christmas bonus and your first thought is to buy that big-ticket item you’ve had your eye on. Your tax return comes in and you feel like going on a well-deserved shopping spree. A lucky scratch ticket wins bigger than you imagined. Receiving little piles of cash doesn’t happen very often, but when it does, we feel an inherent need to treat ourselves. There’s nothing wrong with that, and these windfalls happen so infrequently that to do anything else but spend it on something fun seems almost sacrilegious. However, the sum of your bonus money in a single calendar year could be used more wisely. This is easy money to put toward your mortgage that could amount to thousands of dollars every year.

Invest in Income Property

Many money-savvy homebuyers avoid spending the bulk of their paycheques on mortgage payments by buying property with the potential to earn income through either short-term or long-term rentals. Use the rental payments to pay off your mortgage faster or free up more cash.

Lincolnberg can help you earn income from your property! Our models can be easily customized to make a basement or garden suite. For instance, the Algonquin gives you plenty of room in the basement to add a small kitchen to the layout. With a full bath, bedroom, and spacious living area, the Algonquin is an ideal model home for buyers looking to make extra cash.

Income Property
Finished Legal Secondary Garage Suite Income Property

Find out how you can customize your Lincolnberg home!

Tips on Renting Your Home

Before you decide to turn a part of your home into a rental unit, there are a few things you must decide, such as whether you want to turn your space into a long-term or short-term/holiday rental property. Short-term rentals can make you quick cash and offer you the flexibility to close up shop whenever you don’t feel like renting out part of your home. You can also charge more per night than you would if you were renting at a long-term rate. The downside to vacation rentals is that you aren’t guaranteed a consistent flow of income and you may not live in an ideal location for vacationers.

Renting out part of your basement or spare bedroom to a student or long-term renter better guarantees consistent cashflow and does a better job at safeguarding you from irresponsible or reckless renters—we’ve heard of enough Airbnb horror stories to teach us that application screening is a must!

If you decide to become a landlord, keep these things in mind:

• Your basement, spare bedroom, or garage has to meet certain safety regulations to be legally considered a rental unit; i.e. basement windows in Alberta need to be of a certain size to allow for a quick escape in case of fire.
• You may want to install a separate bathroom, kitchenette, or entrance if you don’t want to share the living space with your tenants.
• You will need insurance.
• Be sure to thoroughly check references before approving a rental application. Not all tenants are created equal.
• Decide how to split the monthly expenses, such as electricity, internet, water, etc.
• Consider the space of your driveway if the tenant has a car.
• Before coming up with a monthly rental fee, research similar rental units in your area to find out what the average rent payments are. Lowballing your rent may seem suspicious to would-be renters, and highballing your rent will put people off.

Paying off your mortgage is a practice in patience and perseverance, but with these tips, you’ll be reaching your financial goals much faster than you ever thought possible!


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