Mortgages in Canada are generally amortized between 25 and
35 year terms. While this seems a long time, it does not have to take anyone
that long to pay off their mortgage if they choose to do so in a shorter period
of time.
With a little bit of thinking ahead, and a small bit of
sacrifice, most people can manage to pay off their mortgage in a much shorter
period of time by taking positive steps such as:
- Making mortgage payments
each week, or even every other week. Both options lower your interest paid
over the term of your mortgage and can result in the equivalent of an
extra month’s mortgage payment each year. Paying your mortgage in this way
can take your mortgage from 25 years down to 21.
- When your income increases,
increase the amount of your mortgage payments. Let’s say you get a 5%
raise each year at work. If you put that extra 5% of your income into your
mortgage, your mortgage balance will drop much faster without feeling like
you are changing your spending habits.
- Mortgage lenders will also
allow you to make extra payments on your mortgage balance each year. Just
about everyone finds themselves with money they were not expecting at some
point or another. Maybe you inherited some money from a distant relative or
you received a nice holiday bonus at work. Apply this money to your
mortgage lender as a lump-sum payment towards your mortgage and watch the
results.
By applying these strategies consistently over time, you
will save money, pay less interest and pay off your mortgage years earlier! If you require more information, visit my
website or contact me.