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

Let there be Darkness

And the environmentalists said let there be darkness. And – for an hour, at least – there was darkness: in downtown office towers and suburban homes, in stores big-box and mom-and-pop, at gatherings long-planned and impromptu.Not a solution, no, but a statement. At 9:30 p.m., the conclusion of the second global Earth Hour, the meter at Toronto Hydro’s control centre that measures city-wide electricity demand hit 2,545 megawatts – 15 per cent below typical demand at that time and 7 per cent below the lowest demand during Earth Hour in 2008.

Toronto’s reduction of 455 megawatts was larger than the cumulative savings of the entire GTA during last year’s event.

The global event, for which people worldwide have been asked to turn off their lights for one hour to demonstrate their concern about climate change, took place between 8:30 and 9:30 p.m. The CN Tower, City Hall, and Honest Ed’s are among the local landmarks that participated.

During 2008’s Earth Hour, Toronto’s total electricity use fell to 2,738 megawatts, 8.7 per cent lower than typical consumption for that hour on that date. The reduction equals a total power cut to 434,450 homes.

Launched in Sydney, Australia in 2007 to raise awareness of the perils of climate change, Earth Hour spread to more than 35 countries, including Canada, in 2008.

More than 80 countries and 2,800 cities are expected to participate today. Organizers said about a billion people would spend the hour in the dark, an exponential increase from an estimate of 50 million last year.

An agreement to replace the Kyoto Protocol, which expires in 2012, is supposed to be reached in Copenhagen, Denmark, this December, and environmentalists’ sense of urgency has spurred interest in this year’s Earth Hour. Last year, only 400 cities participated; Sydney held a solo event in 2007.

In the GTA, hotels welcomed guests by candlelight, community organizations planned flashlight-lit neighbourhood walks, and the Ontario Science Centre and University of Toronto astronomy students organized special star-observation sessions.

In Bonn, WWF activists held a candlelit cocktail party on the eve of a UN climate change meeting, the first in a series of talks leading up to Copenhagen. The goal is to get an ambitious deal to curb emissions of heat-trapping gases that scientists say are dangerously warming the planet.

“People want politicians to take action and solve the problem,” said Kim Carstensen, director of the global climate initiative for WWF, speaking in a piano bar bathed by candlelight and lounge music.

Organizers initially worried enthusiasm this year would wane with the world focused on the global economic crisis, Earth Hour executive director Andy Ridley told the Associated Press. But he said it apparently had the opposite effect.

“Earth Hour has always been a positive campaign; it’s always around street parties, not street protests, it’s the idea of hope, not despair. And I think that’s something that’s been incredibly important this year because there is so much despair around,” he said.

The Chatham Islands, a small chain about 800 km east of New Zealand, switched off its diesel generators to officially begin Earth Hour. Soon after, the lights of Auckland’s Sky Tower, the tallest man-made structure in New Zealand, blinked off.

At Scott Base in Antarctica, New Zealand’s 26-member winter team resorted to minimum safety lighting and switched off appliances and computers.

In Australia, people attended candlelit speed-dating events and gathered at outdoor concerts as the hour of darkness rolled through. Sydney’s glittering harbour was bathed in shadows as lights dimmed on the steel arch of the city’s iconic Harbour Bridge and the nearby Opera House.

And in Egypt, the Great Pyramids darkened, as did the Sphinx.

To the West, floodlights at the Acropolis in Athens were switched off and an outdoor concert was staged on an adjacent hill, which many Athenians approached in a candlelight procession. The Athens International Airport switched off the lights on one of its two runways.

In that other great ancient city, Rome, the Colosseum and St. Peter’s Basilica were plunged into darkness.

In Paris, the Eiffel Tower, Louvre and Notre Dame Cathedral were among 200 monuments and buildings that went dark. The Eiffel Tower, however, only extinguished its lights for five minutes for security reasons because visitors were on the tower, said WWF France spokesperson Pierre Chasseray.

“Above all in the current economic crisis, we should send a signal for climate protection,” said Klaus Wowereit, the mayor of Berlin, one in a handful of German cities switching off lights at city halls and television towers for Earth Day for the first time.

Meanwhile, the Swiss city of Geneva switched off the lights on theatres, churches and monuments. Among them were the Reformation Wall, where floodlights normally illuminate 10-foot statues of John Calvin and other leaders of Protestantism. The city’s motto engraved on either side of the statues is: “After darkness, light.”

All of Spain’s 52 provincial capitals turned off some lights an hour after sunset, silhouetting unlit landmarks such as the royal palace and parliament in Madrid, the Guggenheim museum in Bilbao, and the Alhambra palace in Granada against darkening dusk skies.

A key 2010 football World Cup qualifier against Serbia posed a dilemma for Romanians. “Shall we watch the match or turn off the lights?,” the 7plus daily asked in its main front-page headline.

The UN headquarters in New York and other facilities were dimming their lights to signal the need for global support for a new climate treaty.

UN Secretary Ban Ki-moon called Earth Hour “a way for the citizens of the world to send a clear message: They want action on climate change.”

China participated for the first time, cutting the lights at Beijing’s Bird’s Nest Stadium and Water Cube, the most prominent 2008 Olympic venues.

In Bangkok, the prime minister switched off the lights on Khao San Road, a haven for budget travellers packed with bars and outdoor cafes.

Earth Hour organizers say there’s no uniform way to measure how much energy is saved worldwide.

Earth Hour 2009 has garnered support from global corporations, nonprofit groups, schools, scientists and celebrities – including Oscar-winning actress Cate Blanchett and retired Cape Town Archbishop Desmond Tutu.

McDonald’s Corp. planned to dim its arches at 500 locations around the U.S. Midwest. The Marriott, Ritz-Carlton and Fairmont hotel chains and Coca-Cola Co. also planned to participate.

Harmonized Sales Tax to Hurt Home Buyers

REALTORS® have been calling for governments at all levels to take action on the economy, and, next week, the provincial government will have an opportunity to do its part when it reveals the details of its annual budget. Ironically, given some of the talk coming from Queen’s Park lately, what the Province doesn’t do may be even more important than what it does.

In recent months, Premier McGuinty has been publicly talking about the possibility of combining the five percent federal Goods and Services Tax (GST) with the eight per cent Provincial Sales Tax (PST), to create a single Harmonized Sales Tax (HST). On the surface, this may seem rather benign, but the key point to remember is that these two taxes are not levied in the same way, so many things that are currently only subject to one tax, would, under this scheme, start paying both taxes.

Unfortunately, home buyers and sellers would be one of the hardest hit groups under this proposal, which is why REALTORS® are strongly opposed to it. Currently, the purchase price of re-sale homes is not subject to PST or GST (unlike new housing, which is subject to GST), and it is not expected that the proposed HST would change this, but it would add significant tax to the many services that home buyers and sellers rely on, such as moving costs, legal fees, home inspection fees, mortgage insurance premiums, title insurance, and REALTOR® commissions. For example, for an average GTA home priced at approximately $360,000, a HST could add over $2,000 in upfront taxes on closing costs. This is a substantial barrier to home buyers at a time when they can least afford it.

The prospects are even worse for new housing, which is currently subject to a reduced GST of about 3.2 per cent, instead of the usual 5 per cent, on the purchase price. Under this proposal, the purchase price of newly constructed homes could also be subject to the eight percent PST. According to a study recently conducted for the Building Industry and Land Development Association (BILD), a HST could mean a tax increase on a newly constructed home in Toronto of a whopping $46,676.

As I’ve pointed out numerous times in this column, the housing industry is critical to the economy. Hundreds of thousands of jobs depend on it, both directly and indirectly. For example, a recent study conducted for the Canadian Real Estate Association, found that every re-sale housing transaction results in over $33,000 in spin-off spending on things like renovations, appliances and furniture. By adding significant costs to home buying, a HST risks this type of spending, and runs completely contrary to the Province’s efforts on the economy.

REALTORS® believe that governments at all levels have to take action on the economy; however, sometimes what is not done is just as important as what is done. We hope the provincial government will heed this advice when it comes to the possibility of a HST.

Energy Audit – Part I

The provincial government has introduced legislation, Bill 150, the Green Energy Act, which, if passed, would require mandatory home energy audits prior to the sale of a home. This legislation has not yet been passed and is not yet in effect.

Details

Under the proposed Green Energy Act, home owners would be required to provide information regarding the home’s energy efficiency prior to the sale or lease of the property. Energy efficiency information about the property would have to be determined and provided by standardized methods established by the provincial government.

The Province has not yet provided information on these details. The legislation, if passed, would allow the provincial government to prescribe:
• what energy efficiency information has to be provided and in what manner;
• the cost of home energy efficiency audits;
• the types of residences that these requirements would apply to; and,
• under what circumstances and at what times these requirements would be effective.

Actions

TREB and the Ontario Real Estate Association have been closely monitoring this issue and taking action. A detailed submission was sent to the Minister of Energy and Infrastructure last month, by OREA, to highlight concerns over mandatory home energy audits and to encourage the provincial government to maintain a voluntary system of home energy audits instead of a mandatory system.

Energy Audit – Part II

In recent weeks, provincial proposals regarding mandatory home energy audits and the harmonization of the GST and PST have been priorities. TREB and OREA are working closely to bring the concerns of REALTORS® on these issues to the provincial government and all MPPs. Efforts are on-going and opportunities for TREB Members to take action on these issues are being planned and will be launched soon.
Mandatory Energy Audits – Background

The provincial government has introduced the Green Energy Act, which, if passed, would require home owners to provide information regarding the home’s energy efficiency prior to the sale or lease of the property. Energy efficiency information about the property would have to be determined and provided by standardized methods established by the provincial government. The Province has not yet provided information on these details. This legislation has not yet been passed and is not in effect.

TREB / OREA Actions – Mandatory Energy Audits

TREB and OREA are working closely on this issue. Action is underway and additional actions, including options for TREB Members to directly get involved, are being planned. Recent actions have included:

• Meetings with key officials from Ministry of Energy
• Meetings with key opposition party MPPs
• Concerns submitted to all MPPs formally in writing;
• REALTOR® concerns raised by MPPs during legislative debates on this issue
• Meetings scheduled with Premier’s policy staff
• On-going media efforts, which have been successful in generating public attention

Background – GST / PST Harmonization

With regard to the harmonization of the federal Goods and Services Tax with the Provincial Sales Tax, recent public comments made by government officials have suggested that the government is considering this action. Combing these taxes into a single Harmonized Sales Tax (HST) could have implications for home buyers, including:

• adding significant tax to services such as moving costs, legal fees, home inspection fees, mortgage insurance premiums, title insurance, and REALTOR® commissions; and,
• adding significant tax to the purchase price of newly constructed homes.

TREB / OREA Actions – GST / PST Harmonization

Once again, TREB and OREA are working closely on this issue, and opportunities for Member involvement are being planed. Recent actions have included:

• submitting concerns formally in writing to all MPPs
• submitted formal written concerns to Minister of Finance and the Premier
• planning on-going media efforts