January 30, 20263 min read
This is one of the most useful questions to answer early in the mortgage process. Prepayment privileges let you pay extra principal above the regular schedule without triggering a prepayment penalty, up to the limits in your contract.
The factors that change the answer
Here is what matters most:
- Privileges can include annual lump-sum payments, increases to regular payments or both.
- Limits vary by lender and may be based on the original mortgage amount rather than the current balance.
- Unused annual privileges generally do not automatically carry forward.
- Going above the allowed amount on a closed mortgage can trigger a prepayment charge.
If paying your mortgage faster is a priority, compare the exact prepayment rules before choosing a lender.
Want this applied to your own numbers?
Call Phil Cragg at 866-349-4915 or request a written comparison.
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