Paying off a mortgage can be a daunting task, especially for Canadians with some of the world’s highest housing costs. However, with some planning and discipline, you can pay off your mortgage faster and save thousands of dollars in interest. Here are a few tips to help you do just that.
- Make accelerated bi-weekly payments: Instead of making monthly payments, consider switching to accelerated bi-weekly payments. Accelerated bi-weekly will result in 26 payments per year, equivalent to making one extra monthly payment.
- Increase your payments: If you can afford to do so, consider increasing your payments by a small amount each year. Increasing your payments will help you pay your mortgage faster and save interest.
- Make lump sum payments: If you receive a bonus or a tax refund, consider using it to make a lump sum payment on your mortgage. Lump sum payments will help you pay down your mortgage faster and save money on interest.
- Refinance your mortgage: If interest rates have dropped since you took out your mortgage, consider refinancing. Refinancing your mortgage can lower your monthly payments and help you repay your mortgage faster.
- Avoid penalties: Read the fine print on your mortgage contract and understand the penalties for paying off your mortgage early. Some lenders may charge a fee for paying off your mortgage early, so make sure you factor this into your calculations.
Following these tips can pay off your Canadian mortgage faster and save thousands of dollars in interest. It takes discipline and planning, but the result is worth it. Remember to always consult with a mortgage professional before making any decisions.