Prepayment Privilege

What is "Prepayment Privilege"? A clause in the mortgage that allows the mortgagee to put an extra payment on the principle, usually each year. This can save thousands in interest over the term of the mortgage.

This article that gives various statistics related to mortgages in Canada notes in #2 that only 1 in 4 first time homebuyers actually take advantage of this clause in their mortgage, even though many pay a higher interest rate when they agree to the mortgage terms to have this ability. Does your mortgage have this clause and do you take advantage of it?

Canadian Mortgage Trends - Article