How to pay off your Mortgage sooner
One of the highest financial priorities of Canadian homeowners is to pay off the mortgage as quickly as possible. The faster you pay off your mortgage, the less money you’ll spend on interest & the more equity you are building in your home. The majority of our lending institutions provide you with the following options to help you create your own amortization schedule by paying off the mortgage much sooner:
* Prepayment options of up to 15% of the total mortgage amount on an annual basis without penalties
* You may also increase each payment by up to 15% without penalties.
* Double up your mortgage payment on any scheduled payment date without
penalties
Pay-Off Tips:
* Use your salary bonuses and tax refunds to pay down your principal. More Canadians are becoming aware that, since mortgage interest is not tax-deductible in Canada, (as it is in the US), you are making mortgage payments of both principal and interest with money that you’ve already paid tax on – “after tax dollars”. This makes it even more important to eliminate the drainage of disposable income as soon as possible!
* Keep your payments the same if interest rates drop if you have a variable mortgage as fixed rates do not change throughout the term of your mortgage
* Choose accelerated bi-weekly payments to get a “free” principal reduction equivalent to one full mortgage payment every year – painlessly. Unless you are paid weekly it makes little sense to make weekly payments. All you’d be doing is making a smaller payment, and deferring the difference for a week.
* Choose a shorter amortization period – but do keep in mind that a higher amortization term allows your first five years of expected scheduled payments much lower, allowing you to adjust to being a first time home-buyer. The amortization period can be changed when the term of your mortgage is up. Even if you start out with an extended amortization period, the above pre-payment privileges help you reduce your selected amortization period.
* Use your RRSP-driven tax rebate religiously as a mortgage prepayment method. Even if you can only prepay annually, make sure these funds are set aside for that purpose. Many Canadians will borrow (at prime) to buy an RRSP to ensure the maximum rebate. When applied to the mortgage principal, this refund is a “gift that keeps on giving”. Combining the refund with the tax-free interest earned on the RRSP over the subsequent years will quickly outpace the short-term interest costs of the RRSP loan
Today’s rate special: 3.99% Five Years Fixed
(Applicable Under Quick Closing Program. Special conditions may apply.)
Today’s Fixed Rates
Term | Bank Rate | Our Rate
1 Yr | 4.50% | 3.50%
3 Yr | 5.20% | 3.90%
5 Yr | 5.55% | 4.05%
Today’s Variable Rates
Five Yrs Convertible: 3.30%
Five Yrs Open: 3.50%
Home Equity Line of Credit: 3.50%
(Above Rates are Based on Current Prime Rate of 2.50%)
Brought to you By: Debbie Gomes-Andrade
Mortgage Agent
Lic.# M08010945
