Flexible Mortgage Features
Dear mortgage,
I’m taking time off
to play peekaboo.
Take up to 4 months off with
TD Flexible Mortgage Features.
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.
Payment
Vacation
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.
Learn more
Payment
Pause
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.
Learn more
Payment
Reduction
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.
Learn more
Payment Vacation
Make lump-sum payments or pre-pay a little more each month so that your mortgage is paid off faster and at the same time work towards the opportunity to use that prepaid amount 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
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.
Expand 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.
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.
Expand 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 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.
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.
Expand 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 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.
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 | $519.96 |
| 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 |
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