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
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
|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.
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.
I’m taking time off to make memories thanks to a TD Payment Vacation.