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:

Expand How it works:

Option 1: Prepaid payment reduction

  • Prepay your mortgage using your prepayment privileges in order to accumulate a prepaid amount
  • Make prepayments 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.

Collapse 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.

expand Legal and other information

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