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But if you can afford it, financial experts say making an additional one-time payment can help you speed up your debt path.
“One-time payments on mortgages are a very powerful strategy to save you interest and freely mortgage your loan,” said Patty Hopper, a mobile mortgage expert in Vancity, North Vancouver, B.C.
In addition to regular payments, you also have a one-time payment on your mortgage, which allows you to reduce your outstanding balance. This can save you cash in the long run, as you will no longer pay interest on this amount.
Hopper says many people don’t have extra cash flow to pay for additional payments, but if you’re lucky enough to get a bonus or tax refund at work, it can be used to make a one-time payment once a year.
“Any point will save you interest,” Hopper said.
When the mortgage rate is less than 2%, it is difficult to make money using extra cash instead of investing that money in hopes of getting more than the rate you pay.
However, with higher interest rates, coupled with volatile stock markets, it is certainly difficult to generate cases of trying to do better by investing in funds and repaying additional debts and saving interest.
You want to compare your mortgage interest rates with your expected return on investment, said Mengdie Hong, senior financial planner at Royal Bank of Canada (RBC) in Ottawa.
“Simply put, if your mortgage rate is higher than what you expect from your investment…it’s better to allocate this excess cash to the mortgage, but if your expected returns are significantly higher than your mortgage, you might want to invest.”
If you face higher interest rates after renewal, making a one-time payment on your mortgage can also help you make any payments as your outstanding balance will be lower.
And if you find yourself selling your home before you fully repay the loan, you will end up getting more cash because you owe less money.
“You have more cash on hand to make your next purchase or move forward in the next part of the journey,” Hopper said.
There is no limit to the size of any one-time payment, which will vary between lenders. How much you can repay as early as possible and the documents you signed when you sign the loan will be summarized once.
Both Hong and Hopper said additional payments on mortgages should not be paid in isolation and must be considered as part of the overall financial plan. The status of your emergency fund, RRSP, RESP and TFSA contributions, as well as other debts, all need to be considered.
If you have other high interest debts, such as outstanding credit card balances, that may be where you want to pay, Hong said.
“So, before you make a one-time payment, you may need to review all the debts you have,” she said.
Hong said it feels great to pay off your mortgage and become debt-free as soon as possible, but you don’t have to come at the expense of flexibility.
“We always want flexibility and choice in our financial plans,” she said.
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Last modified: June 9, 2025
