As 2024 unfolds, Canadian homeowners find themselves at a crucial point in their mortgage – renewal time! In this article, I will explore the current dynamics of the Canadian mortgage market, what to expect when renewing your mortgage, and considerations to ensure a seamless process. If there’s a topic that homeowners are discussing in 2024…Read Article
Tips for Paying Off Your Mortgage Faster in Canada
Becoming mortgage-free sooner is a financial goal that many Canadian homeowners aspire to achieve. Imagine the freedom of owning your home outright, without the burden of monthly mortgage payments.
In this article, I share practical tips to help you pay off your mortgage faster. Whether you’re a first-time homebuyer or looking to expedite your mortgage repayment, these strategies can make a significant impact on your journey to becoming mortgage free!
Make bi-weekly payments.
One effective way to pay off your mortgage faster is by switching to bi-weekly payments instead of monthly. Over the life of the mortgage, this can significantly reduce the total interest paid and help you pay off the principal amount sooner.
Round up your payments.
Consider rounding up your mortgage payments to the nearest hundred dollars. For example, if your monthly payment is $1,325, rounding it up to $1,400 can make a substantial difference over time. The additional amount goes directly towards paying down the principal, accelerating your journey to a mortgage-free home. Additionally you can round up your payment to an additional 15% of the original mortgage amount.
Lump sum payments.
Take advantage of any windfalls or bonuses by making lump sum payments towards your mortgage. Many mortgage agreements allow for prepayments without penalties. Use tax returns, work bonuses, or any unexpected financial gains to make lump sum payments, reducing your principal and interest over the long term.
Keep an eye on interest rates and consider refinancing your mortgage if you can secure a lower rate and it’s the right time. While refinancing may involve some upfront costs, the potential savings in interest over the life of the loan can be worth it. Reach out to me, a mortgage broker with 12 years experience, to help evaluate whether refinancing makes sense for your specific situation. I can go through your situation and help you decide what your best plan of action is.
Reach out to chat about your options.
Paying off your mortgage faster requires commitment and strategic financial planning. By implementing one or more of these tips, you can work towards paying off your mortgage sooner to become mortgage free.
Remember, every extra dollar you put towards your mortgage today brings you one step closer to the ultimate goal!