I was reading the results of a CIBC mortgage study that found that the average Canadian homeowner doesn’t think they’ll be mortgage free until they’re 57. Then I scrolled down and read the following comment.
Picked up my first & only house in YYC back in spring of 2005 when I was 31. I went in with 10% down and I took a variable mortgage, bi-weekly payments, increased the payments by $300+ above minimum. I will have my house paid off when I’m 46 if my rate stays the same and I don’t increase my payments or do a lump sum payment between now and then. Be smart. Buy within your means, not up to what the bank will give you. Make extra payments and go bi-weekly. It all counts!
This person has their act together. They have a plan and are thinking about the future.
I’m amazed at how many people get caught up in the rate game. They spend a ton of time and energy researching, surfing, calling, haggling, all in the interest of saving a buck.
Then it all stops!
Don’t get me wrong, I get it. Shopping around for a low interest rate will absolutely save you money. But if you want to truly save money on your mortgage, it comes down to more than what interest rate you will pay.
The bigger picture, more importantly, the BIGGER mortgage savings are achieved through your payments.
More specifically, pay your mortgage more often. The more frequently you pay, the better. That’s because your mortgage accrues interest each and every day. The shorter the space between payments, the less interest adds up.
At the VERY least, I insist that my clients choose accelerated bi-weekly mortgage payments.
Consider making lump sum payments. Getting a nice tax return? Consider throwing it on your mortgage. Did you miss the RRSP contribution deadline, don’t worry, pay it down on your mortgage instead.
You may be surprised to know that adding just $1,000 extra to your mortgage per year will allow you to pay it off years sooner. Combine that with accelerated bi-weekly payments and you’ll save even more cash off the interest you pay for your home.
Our new iMortgage program helps you pay off your mortgage faster AND protects you against the shock of rising interest rates.
Ask me how our iMortgage program can protect you against rising interest rates and pay down your mortgage quicker than any program on the market.
Mark Fidgett is a Vancouver mortgage broker and the driver behind www.NotaPennyDown.com
Your Vancouver Mortgage Broker For Life
P.S. Who’s the next person you know who wants to save thousands off their mortgage? Be sure to give me a call so we can help them! 604-273-2002