Accelerated Mortgage Payments: How to Pay Off Your Home Faster
Hi, WealthTrack founder David Pipe here. For most Canadians, a mortgage is the single largest debt they’ll ever take on. Paying it off faster means saving money on interest and achieving financial freedom sooner. But how can you shorten a 25-year or 30-year mortgage without drastically changing your lifestyle?
One powerful solution is accelerated mortgage payments. This simple adjustment to your payment schedule can save you thousands of dollars in interest and cut years off your amortization period—all without significantly increasing your budget.
In this article, we’ll explain what accelerated mortgage payments are, how they differ from regular payment schedules, show examples of potential savings, and offer tips for deciding whether accelerated payments are right for you.
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What Are Accelerated Mortgage Payments?
Accelerated mortgage payments are a repayment strategy where you make slightly higher or more frequent payments than you would on a standard schedule. The goal is to pay down your mortgage principal faster, which reduces the amount of interest charged over time.
The two most common accelerated schedules are:
Accelerated Bi-Weekly Payments
Instead of 12 monthly payments, you make 26 payments per year (every two weeks).
Each payment is half of a monthly payment, but because there are 26 bi-weekly periods, you end up making the equivalent of 13 monthly payments per year.
That “extra” payment reduces your principal faster.
Accelerated Weekly Payments
Instead of 12 monthly payments, you make 52 payments per year.
Each payment is one-quarter of a monthly payment, which again adds up to an extra full payment each year.
Both methods achieve the same result: an extra payment toward your mortgage annually, applied directly to the principal, without requiring you to write a separate lump-sum cheque.
Regular vs. Accelerated Payments
It’s important to understand the difference between regular and accelerated bi-weekly or weekly payments:
Regular Bi-Weekly/Weekly Payments: Simply split your monthly payment into two or four equal parts. Over the year, this still adds up to 12 full payments—no extra savings.
Accelerated Bi-Weekly/Weekly Payments: Calculate half (or a quarter) of your monthly payment and pay it every two weeks (or weekly). Because of the calendar, this equals 13 monthly payments per year—one more than usual.
That single additional payment each year is what drives the interest savings and faster payoff.
How Accelerated Payments Save You Money
Mortgage interest is calculated based on your outstanding principal. By reducing the principal more frequently and by a larger amount, you decrease the interest charged in subsequent periods. Over the long term, the effect compounds.
Here’s an example:
Mortgage Amount: $400,000
Interest Rate: 5%
Amortization: 25 years
Monthly Payment: $2,338
Regular Monthly Payments
Annual Payments: 12 × $2,338 = $28,056
Total Interest Over 25 Years: ~$301,400
Mortgage Paid Off: 25 years
Accelerated Bi-Weekly Payments
Bi-Weekly Payment: $1,169
Annual Payments: 26 × $1,169 = $30,394 (~$2,338 more than monthly)
Total Interest Over ~22 Years: ~$268,000
Mortgage Paid Off: ~22 years
Savings:
Interest saved: ~$33,400
Time saved: ~3 years
This example shows how a small change—adding one extra monthly-equivalent payment per year—can have a dramatic effect over time.
Benefits of Accelerated Mortgage Payments
Pay Off Your Mortgage Faster
Reducing the term by several years means you’ll be mortgage-free sooner, freeing up income for retirement savings, investments, or lifestyle goals.
Save Thousands in Interest
Even at modest interest rates, accelerated payments save tens of thousands of dollars over the life of a mortgage.
Build Equity Faster
With more of your payments going toward principal earlier, you own a larger share of your home sooner. This is especially valuable if you plan to refinance or sell.
Budget-Friendly Approach
Accelerated payments don’t feel like a major lifestyle change. Instead of making a big annual lump sum, the “extra” payment is spread out across the year.
Who Should Consider Accelerated Payments?
Accelerated mortgage payments can benefit most homeowners, but they’re especially helpful if:
You have a long amortization period (25 or 30 years).
You want to reduce overall interest costs without committing to large lump-sum prepayments.
You can comfortably budget for slightly higher or more frequent payments.
You value the peace of mind that comes with being mortgage-free earlier.
However, they may not be the best fit if your budget is already tight, since the annual cost is higher.
How to Set Up Accelerated Payments
Check With Your Lender
Most Canadian lenders offer accelerated bi-weekly and weekly payment options.
Confirm It’s “Accelerated”
Some lenders advertise bi-weekly or weekly payments but only split your monthly payment into smaller chunks. Ensure your plan is truly accelerated (i.e., adds up to 13 monthly payments per year).
Automate Payments
Set up automatic withdrawal every two weeks or weekly. Automation helps you stay consistent without extra effort.
Track Your Savings
Use an amortization schedule or an accelerated payments calculator to see how much time and interest you’re saving. This makes the benefits feel real and motivating.
Common Misconceptions About Accelerated Payments
“I Can’t Afford Higher Payments.”
Accelerated payments don’t require doubling your payment—they only add the equivalent of one extra monthly payment per year.
“It Doesn’t Make a Big Difference.”
Over 20+ years, even one extra payment annually can cut years off your mortgage.
“It’s Complicated to Set Up.”
Most lenders offer accelerated options as a standard feature. Often, it’s as simple as checking a box when setting up your payment plan.
Tips to Maximize Savings
Combine With Prepayments: Add lump-sum payments when possible—tax refunds, bonuses, or extra cash can accelerate your payoff even more.
Choose Accelerated Bi-Weekly Over Weekly: Both save money, but bi-weekly often aligns better with paycheques, making budgeting easier.
Review Annually: As your income grows, consider increasing your accelerated payments or switching to a shorter amortization.
Avoid “Payment Holidays”: Skipping payments will offset the progress you make with acceleration.
Accelerated Payments vs. Other Strategies
While accelerated payments are a smart strategy, they’re just one piece of the mortgage payoff puzzle. Other approaches include:
Lump-Sum Prepayments: Applying extra cash directly to principal.
Shorter Amortization: Choosing a 15- or 20-year amortization instead of 25 years.
Refinancing: Moving to a lower interest rate can complement accelerated payments for maximum savings.
The best approach often combines multiple strategies.
Conclusion
Accelerated mortgage payments are one of the simplest, most effective ways for Canadians to pay off their mortgages faster and save thousands in interest. By making slightly more frequent payments—whether bi-weekly or weekly—you effectively add one extra full payment per year. Over time, this shortens your amortization and reduces the total cost of your loan.
The best part? It doesn’t require a major lifestyle change. Accelerated payments fit naturally into most household budgets, making them a practical solution for homeowners who want to build equity faster and achieve mortgage freedom sooner.
If you’re considering this strategy, talk to your lender about accelerated options and try an accelerated payments calculator to see your personalized savings. You might be surprised at how much of a difference one extra payment a year can make.
