Debt2 min read · Updated October 21, 2026

Debt avalanche or snowball: which pays off debt faster in Canada?

Repo-linked (EBLR): your rate rises by the same 0.25% at the next reset date, unless your lender holds back some of it. Resets happen at least once every three months, so expect the change within about three months of 7 October.
MCLR-linked: your lender's own cost of funds drives the rate and it resets on its own date, often every six or twelve months. The effect arrives later and may be smaller. Our guide to [[blog:eblr-vs-mclr-home-loan|EBLR and MCLR]] explains the difference.
Fixed rate: nothing changes until the fixed period ends.

A worked example of the two main ways to pay off credit card and loan debt, with the interest each costs.

How each works

Avalanche: extra money to the highest rate first. Snowball: extra money to the smallest balance first.

Is avalanche better than snowball?

It costs less interest. Snowball can keep you motivated.

Should I save or pay debt first?

Keep a small emergency fund, then clear high-rate debt.

Published October 21, 2026. Estimates, not tax or mortgage advice.