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Flexible Mortgage Features

TD Flexible Mortgage Features help you take a Payment Vacation.

Dear mortgage,
I’m taking time off
to make memories.

Take up to 4 months off from your mortgage payments
with a TD Payment Vacation.

 

A TD mortgage offers a range of features that let you manage your mortgage even as your goals and financial needs grow and change throughout the years.

If you're preparing for a big or life-changing event like staying home with a new baby, taking a sabbatical from work, or taking an extended trip consider a payment vacation.

When you need to take a break from your mortgage payment or need to respond quickly to an unexpected situation, payment pause can help you manage.


Planning on taking a parental leave, a sabbatical from work, pursuing your studies while working part-time, or finance an unexpected expense? A payment reduction is a good feature to consider.

Payment Vacation

Make lump-sum payments or pre-pay a little more each month towards the opportunity to take up to 4 months off from making your mortgage payment when it benefits you the most.

A payment vacation might be right for you if you need to:

  • Stay at home with a new baby
  • Continue your education
  • Take a sabbatical from work

Want to know more?

Want to know more about our Flexible
Mortgage Features?


Call us toll-free at 1-888-282-8637, or visit a branch in your area.

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How it works:

  • A payment vacation is only available on new mortgages or renewals of existing mortgages completed after January 24, 2011
  • First, you must prepay your mortgage using your prepayment privileges in order to accumulate a prepaid amount:
    • Make lump sum payments against your mortgage
    • Increase the amount of your regular principal and interest payment
    • Take advantage of rapid weekly or rapid bi-weekly payments
  • The number of eligible payments covered by your Payment Vacation will be based on a combination of your prepaid amount and your current regular monthly mortgage payment
  • A payment vacation is permitted once per term for up to four months

A payment vacation will result in interest capitalization. Find out what that means for your mortgage below.

How do Flexible Mortgage Payment Features affect your mortgage?

Flexible Mortgage Payment Features will result in interest capitalization. That means the interest will be added back to the principal outstanding on your mortgage.

  • Interest is added back on each mortgage payment due date.
  • The amount of interest being capitalized cannot cause your mortgage to exceed the lesser of a 90% loan-to-value ratio or exceed your original principal balance.
  • The loan-to-value (LTV) ratio expresses the amount of a mortgage as a percentage of the total appraised value of a property, as determined by TD Canada Trust.
  • If necessary, we will adjust the amortization period remaining at renewal so that the mortgage does not exceed the original amortization period remaining. This may result in an increase to the amount of your regular payments after the renewal.

Property taxes and mortgage critical illness and/or life insurance must continue to be paid (if applicable).
To be eligible, all TD Canada Trust debt, including your mortgage, must be – and continue to be – up to date, with no current delinquencies or arrears. As well, there must be no evidence of previous bankruptcy or written off debt.

See how it could work for you

See an Example:

Ken and Cheryl are expecting their first child.
They meet the eligibility requirements and would like to take a mortgage payment vacation during their parental leave.
To do so, they'll need to accumulate a prepaid amount in the time before baby arrives.

See how this works

Payment Pause

When you need to respond to an unexpected situation, it is great to know that you may have the flexibility to pause a mortgage payment.

Payment Pause might be right for you if you need to:

  • Respond quickly to an unexpected situation
  • Take a short break from making your mortgage payment

How it works:

  • It gives you the flexibility to skip the equivalent of one monthly mortgage payment
    • One time per calendar year
    • No more than four times during the amortization period of your mortgage
  • Skipped payments do not need to be consecutive, so long as they do not exceed the equivalent of 1 monthly payment per calendar year or cross over the calendar year end
Payment Frequency Monthly Mortgage Payment Equivalent
Monthly 1 payment
Bi-weekly, bi-weekly rapid or semi-monthly 2 payments
Weekly or rapid weekly 4 payments

Payment Pause will result in interest capitalization. Find out what that means for your mortgage below.

How do Flexible Mortgage Payment Features affect your mortgage?

Flexible Mortgage Payment Features will result in interest capitalization. That means the interest will be added back to the principal outstanding on your mortgage.

  • Interest is added back on each mortgage payment due date.
  • The amount of interest being capitalized cannot cause your mortgage to exceed the lesser of a 90% loan-to-value ratio or exceed your original principal balance.
  • The loan-to-value (LTV) ratio expresses the amount of a mortgage as a percentage of the total appraised value of a property, as determined by TD Canada Trust.
  • If necessary, we will adjust the amortization period remaining at renewal so that the mortgage does not exceed the original amortization period remaining. This may result in an increase to the amount of your regular payments after the renewal.

Property taxes and mortgage critical illness and/or life insurance must continue to be paid (if applicable).
To be eligible, all TD Canada Trust debt, including your mortgage, must be – and continue to be – up to date, with no current delinquencies or arrears. As well, there must be no evidence of previous bankruptcy or written off debt.

Learn how payment pause can work for you.

See an example:

Lee's house needs a new furnace.
He'll be challenged to manage this expense and his mortgage payment this month.
Lee meets the eligibility requirements and would like to pause a mortgage payment. This will give him the flexibility he needs to re-allocate his funds, and put his mind at ease.

See how this works

Payment reduction

A payment reduction lets you continue making a portion of your mortgage payments, while making room for a new chapter in your life. You can either plan ahead and prepay the reduced amount of your mortgage payments, or take a one-time payment reduction.

Payment reduction might be right for you if you need to:

  • Stay at home with a new baby
  • Take a sabbatical from work
  • Continue your education while working part-time

How it works:

Option 1: Pre-paid payment reduction

  • Prepay your mortgage using your prepayment privileges in order to accumulate a prepaid amount
    • Make lump sum payments against your mortgage balance
    • Increase the amount of your regular principal and interest payment
    • Take advantage of more frequent payments
  • Based on the amount you have prepaid, you may be eligible for a payment reduction for up to four consecutive months

Option 2: One-time payment reduction

  • If you have not accumulated a prepaid amount, you may be able to reduce the equivalent of one monthly mortgage payment
    • One time per calendar year
    • No more than four times during the amortization period of your mortgage
Payment Frequency Monthly Mortgage Payment Equivalent
Monthly 1 payment
Bi-weekly, bi-weekly rapid or semi-monthly 2 payments
Weekly or rapid weekly 4 payments

A payment reduction will result in interest capitalization. Find out what that means for your mortgage below.

How do Flexible Mortgage Payment Features affect your mortgage?

Flexible Mortgage Payment Features will result in interest capitalization. That means the interest will be added back to the principal outstanding on your mortgage.

  • Interest is added back on each mortgage payment due date.
  • The amount of interest being capitalized cannot cause your mortgage to exceed the lesser of a 90% loan-to-value ratio or exceed your original principal balance.
  • The loan-to-value (LTV) ratio expresses the amount of a mortgage as a percentage of the total appraised value of a property, as determined by TD Canada Trust.
  • If necessary, we will adjust the amortization period remaining at renewal so that the mortgage does not exceed the original amortization period remaining. This may result in an increase to the amount of your regular payments after the renewal.

Property taxes and mortgage critical illness and/or life insurance must continue to be paid (if applicable).

To be eligible, all TD Canada Trust debt, including your mortgage, must be – and continue to be – up to date, with no current delinquencies or arrears. As well, there must be no evidence of previous bankruptcy or written off debt.

Interested in a payment reduction?

See an example:

Raj is considering a sabbatical from work.
But that's going to mean a reduction in his income.
Raj meets the eligibility requirements and would like to set up a prepaid mortgage payment reduction. So he'll need to accumulate a prepaid amount that he can use to reduce his regular mortgage payment while he's not working.

See how this works

Pay for your mortgage faster and save money

There are several simple strategies you can do to help you pay off your mortgage as quickly as possible and free up funds sooner for other priorities – like travelling, paying for school or upgrading your home.

Expand Increase the frequency of payments

Take advantage of biweekly or weekly payment options. To do so, half the monthly payment amount you currently make, or even quarter it and make payments on a weekly basis. The result? You pay less interest over time, and more of your money will go against the principal you owe.

Example: A $100,000 mortgage, 25-year amortization period, 6% interest rate on a 5-year term.

  Monthly Payments Bi-Weekly Payments Weekly Payments
Payment $631.81 $319.91 $159.96
Interest over term $28,219.33 $27,622.40 $27,594
Outstanding Principal Amount at the end of 5 years $89,830.73 $85,950.54 $85,921.62
Your interest savings   $596.93 $624.57
Your extra principal balance reduction   $3,880.19 $3,909.11

Expand Take advantage of increased payment options

By increasing your mortgage payment amount, you can significantly reduce your interest costs and have the benefit of paying down your mortgage faster. As a TD Canada Trust customer, you may increase your payment by up to 100% of the regular payment amount during the term of the mortgage.

Example: A $100,000 mortgage, 25-year amortization period, 6% interest rate on a 5-year term with monthly payments increased by 10% to $703.79.

Total interest over term $27,602.11
Outstanding principal amount at the end of the term $85,374.71
Your interest savings $617.22
Your extra principal balance reduction $4,449.68

Expand Take advantage of lump-sum payments

You can pay off your mortgage faster by making lump sum payments. Lump sum payments are applied to your principal amount, and can significantly reduce your interest costs. As a TD Canada Trust customer, you can make a lump-sum payment of up to 15% of the original borrowed amount each year without prepayment charge on your closed mortgage term.

Example: A $100,000 mortgage, 25-year amortization period, 6% interest rate on a 5-year term with 2% lump sum payments made annually on the anniversary of the mortgage start date.

Annual lump sum payment every year for four years $2,000
Total interest over the term $26,924.85
Outstanding principal amount at the end of the term $78,536.25
Your savings $1,294.48

Expand Combine money saving strategies

You don’t have to use just one strategy to save – you can combine all three of the ideas outlined above.

Example: A $100,000 mortgage, 25-year amortization period, 6% interest rate on a 5-year term with weekly payments, increased by 10% (to $175.95/week) and annual lump sum payments of 2% ($2,000) made annually on the anniversary of the mortgage start date for 4 years.

Total interest over term $25,620.87
Outstanding principal amount at the end of the term $69,804.05
Your interest savings $2,598.46
Your extra balance reduction $15,570.66

Expand Choose a shorter amortization period

If you have the opportunity of choosing a shorter amortization period, you can reduce the amount of interest you pay over the shortened life of your mortgage.

Example: A $100,000 mortgage, 25-year amortization period, 6% interest rate on a 5-year term with a reduced amortization period.

Amortization Period Payment Amount per month Interest cost over the amortization period Interest savings over the term Balance remaining at the end of the term
20 years $712.19 $70,882.81 $21,001.15 $84,789.67
15 years $839.89 $51,146.89 $40,737.07 $75,895.73
10 years $1,106.51 $32,757.91 $59,126.04 $57,326.42

Get a mortgage that fits
your lifestyle.

TD's Flexible Mortgage Features can help you manage your mortgage to meet your needs.

Watch the video to learn more.

Learn more about TD’s Flexible Mortgage Features.

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