Mortgages are a strange animal. On the one hand, it’s mortgages that empower home ownership, while on the other hand, they represent a huge amount of debt. For most of us, it’s the biggest debt we’ll ever have. So while we work really hard to qualify for a mortgage, once we have it, we should want to get rid of it as quickly as possible
Here are three things you can do to help get rid of your mortgage, and pay less interest doing it!
Accelerate Your Payment Frequency
It sounds simple enough, but making the change from a monthly payment to an accelerated bi-weekly payment is one of the easiest ways to turbo-charge the repayment of your mortgage over time. Chances are you won’t even notice a difference. Typically, on monthly payments, your mortgage is split into 12 equal payments. Accelerated bi-weekly payments divide your payments in half, but rather than 24 payments, you make 26. It’s the extra 2 payments each year that accelerate the repayment of your mortgage.
Annual Financial/Mortgage Review
When you signed your original mortgage documents, chances are you locked into a term between 1-10 years. Most Canadians opt for the 5 year term and as such because they feel locked-in, they turn on the auto-pilot and rarely evaluate their mortgage mid-term. An annual mortgage review is a great idea, not because your mortgage has changed, but because most likely your financial situation has. Maybe you’ve gotten a raise at work, received a bonus or family inheritance. In this case, you should consider increasing your mortgage payments or make a lump sum payment against the principal balance outstanding.
Call at Renewal
Did you know that up to 75% of Canadians simply sign the renewal letter they get from their lender without looking for a better deal? This can be a huge mistake. One of the best ways to make sure you’re paying the least amount of interest over the course of your mortgage, is to make sure that you get the best mortgage product every time you negotiate a new term. When your mortgage is up for renewal, please get in touch.
If you have any questions about your mortgage (or how to get rid of it), don’t hesitate to contact me anytime.