Unless you have a very generous uncle, you will likely require some help from the bank to finance your home. Finding a lender you can trust is important, and understanding the terms of your mortgage contract is essential. You should be aware of the type of mortgage you are committing to, the interest rate you will be paying, any additional fees that you might incur (for further credit checks or independent appraisals, for example), and the rules and regulations you are subject to. But we digress…
All of this is important, but we want to specifically shed light on what you can do to save more money and pay off your mortgage faster. If you have the ability to make additional contributions towards your mortgage debt, you will save interest, build additional equity, and become mortgage-free faster.
Here are some suggestions to help you pay off your mortgage faster:
- Change your payment schedule to bi-weekly or weekly instead of monthly. Over the course of the year, this will automatically add a payment or two overall.
- Increase your payment. Rounding your payment up, even a little, will chisel a little extra off your principal debt.
- Make a lump sum payment. If you have a chunk of change sitting around, consider writing a cheque to whack back a larger (or smaller!) amount of your mortgage.
Every extra dollar beyond your minimum payment that you contribute is removed directly from your principal debt. That is, you will NEVER be required to pay interest on this amount, so you automatically save. Small changes can add up to hundreds and thousands of saved dollars over the years, so the effort is certainly worthwhile. The cost of borrowing is historically low at the moment… but this won’t last forever. Developing good habits to minimize and eliminate debt as efficiently as possible NOW will pay great dividends later.
Of course, we’re not mortgage specialists. But we know a few great ones who can help point you in the right direction to make smart choices to ensure you invest wisely. Call us today and we’d be happy to point you in the right direction!