A recent CAAMP {Canadian Association of Accredited Mortgage Professionals} survey of the Canadian mortgage market has shed light on some interesting (and very good!) news:
- 78% of Canadian homeowners that participated in the survey had mortgage amortizations of less than 25 years {an amortization is how long it will take to pay off a mortgage in full}
- mortgage borrowers are working to pay off their mortgages faster; over 22% voluntarily increased their mortgage payments over the year and 18% made a lump-sum payment towards their mortgage
You can pay off your mortgage faster as well, using a few {or all} of our recommended strategies:
- pay your mortgage weekly or biweekly instead of monthly; monthly payments equate to 12 payments (one per month) over a year. Whereas a weekly or biweekly payment frequency means that an additional mortgage payment will be made each year. Example: $1000/month * 12 = $12,000 paid to the mortgage in a year. $250/week * 52 weeks = $13,000 paid OR $500 biweekly * 26 weeks = $13,000/year. This extra payment means interest savings for you and a shorter amortization
- use your tax refund to make a lump sum payment towards your mortgage
- take advantage of your bank's prepayment options. Your Bob Hanscom Mortgage Agency associate will tell you what they are - examples of prepayment options may include the lump sum payment; doubling your mortgage payment; increase your mortgage payment, etc.
- if you currently have a high mortgage interest rate, it may not hurt to see if paying a penalty to get out of your mortgage and into a new mortgage with a lower interest rate would make sense. We can help you determine this
