betterwayHow to pay off your mortgage sooner!
Getting hooked on a mortgage based just on the lowest interest rate could lead to regret.

Accelerate your payments. If you do have the extra budget room, consider adjusting your payment plan.

For example, if you go on a bi-weekly accelerated schedule, making a payment every 14 days, instead of twice a month, you’ll have made the equivalent of 26 payments, by the end of the year.

Smaller, more frequent payments will reduce your interest costs and get you mortgage-free faster.
Make a lump sum payment. Say you get a bonus at work or receive an inheritance – putting a chunk of that windfall toward your mortgage can make a difference.

(Note: the lump sum contribution is over and above the amount you are allowed to contribute in additional bi-weekly payments.)

Reduce your amortization. Tip the scale a little bit so that a bigger portion of your payment is going towards your principal for that portion.

Questions to ask your-self when considering a mortgage

  • Can I take advantage of the federal government’s first time home buyers’ plan?
  • What type of mortgage suits my budget and lifestyle?
  • How sensitive am I to interest rate changes – whether they go up or down?
  • Should I choose a short or a long-term mortgage?
  • What type of life insurance to cover my mortgage best suits my needs?
  • Should the insurance pay the financial institution or my family?
  • Do I need disability insurance?

Questions to ask yourself when it’s time to renew your mortgage

  • Can I afford to increase my regular payment?
  • Can I pay down the mortgage?
  • Should change my payment frequency – i.e. monthly to semi-monthly or bi-weekly?
  • Do I plan to sell the property in the near future?
  • Is now the time to refinance my mortgage to complete renovations, consolidate other debts, top-up my registered retirement savings plan?
  • Fixed rate or variable rate – how sensitive is I am to potential interest rate changes?
  • Should I choose a short or a long-term mortgage?

Answering these questions enables you to structure and manage your mortgage and goes a long way to helping you achieve your long-term Real Estate Investment goals.