Prepayment privileges
Almost every Canadian mortgage lets you pay down a chunk of your principal early each year with no penalty, and most people never use it.
Nearly every closed Canadian mortgage comes with three built-in ways to pay it off faster without triggering a penalty. The first is a lump-sum payment: once a year you can put a cash amount straight against your principal (the actual amount you borrowed, not the interest). The second is a payment increase: you can raise your regular payment, often by a set percentage. The third is the double-up: you can pay an extra scheduled payment on top of a regular one. These are your prepayment privileges, and they come standard, no negotiation required.
The size of each privilege is set by your lender and written into your mortgage. The common range is 10% to 20% per year, and 15/15 or 20/20 (that is, a lump sum of up to 15% or 20%, plus the ability to raise your payment by the same percentage) are typical. One detail trips a lot of people up: the lump-sum limit is a percentage of your original loan amount, not your current balance. So on a $500,000 mortgage with a 15% privilege, your annual lump-sum room is $75,000 for the whole term, even after the balance drops.
The privilege runs on your mortgage anniversary, and here is the catch worth knowing: unused room almost never carries forward. If you skip a year, that room is gone. You do not have to use the full amount in one payment either. Many lenders let you spread lump sums across the year, and you can combine all three tools. Every extra dollar of principal you knock down early stops accruing interest for the rest of the term, which is where the real savings come from, not from the payment itself but from the years of interest you never pay.
Read your own mortgage before assuming what you have. The exact percentage, whether lump sums can be split up, whether a payment increase can later be reversed, and the anniversary date all vary by lender, and some products marketed as low-rate come with thinner privileges. The privilege percentage and reset rules are set in your contract, so that document is the only source that is accurate for your specific mortgage.