Paying off your Mortgage Faster

By: Mark Lukwinski

Paying off your Mortgage Faster

Tags: Mortgage, Debt, Debt Free

Your mortgage is calculated to hang out for a while, but you can help speed things up by doing a few things which will not only make you debt-free faster, but save you significant cash, too!

Round up your mortgage payment
Every penny counts toward your mortgage so, instead of paying $637 every two weeks, tell your lender you will pay $700 every two weeks. Adding that extra $63 will help you out hugely and chances are you won't even notice in your regular budget.

Increase your payment frequency
Most people have their mortgage paid on a monthly basis, but if you bump that up to bi-weekly payments, you will take years off your amortization period and also save huge on interest payments.

RRSPs
Increase your RRSP contributions and then put your tax refund directly against the principal of your mortgage. 

Raise at work
If you received a raise at work, it is normal to think of ways how this will change your lifestyle. However, if you make no changes to your lifestyle and act like the raise never happened by increasing your mortgage payments, you will be free of that mortgage so much faster, and that's when the lifestyle changes really begin.

Lump sump payments
Most banks in Canada allow you to make an extra mortgage payment each year which is directly applied to your principal. Take advantage of this. Don't think that any small amount won't make a dent against your mortgage because it does and always will. 

Talk to your lender
Your lenders will sit down with you to sort out so many ways to pay off your mortgage faster. There are checks and balances in place to ensure that we don't get in over our heads, affect our credit score and also so that the banks don't lose out, but talking to your lender and keeping ahead of mortgage rates and information will always benefit you. 


Mark