HOW DO I PAY OFF MY MORTGAGE FASTER?

VANCOUVER BUYERS GUIDE

Paying off your home doesn't have to take a lifetime. By planning ahead and sticking to the plan, you have the opportunity to pay your mortgage off faster. Here are seven ways to pay your mortgage down faster and decrease the amortization and interest costs off your mortgage:

  • Choose a mortgage with a prepayment option - A prepayment option gives you the right to prepay specified amounts of your mortgage principal
  • Shorten your amortization period - By shortening your amortization period to less than 25 years you can create huge interest savings
  • Increase your regular mortgage payment - Increasing your regular mortgage payment helps you reduce your mortgage principal faster, which means you save interest
  • Increase your mortgage payment frequency - If you increase the frequency of your mortgage payments from monthly to accelerated bi-weekly, you are making one additional monthly payment every year, which will cut your interest cost over the life of your mortgage
  • Invest your tax refunds and cash windfalls - If you find yourself with more money than you anticipated, you should consider making a lump-sum mortgage payment against the principal. Your mortgage principal will decrease and you won't have to change your spending habits
  • Invest your pay raises - If you find yourself with a pay raise, increase your mortgage payment amount. Increasing your mortgage payment helps you to reduce your mortgage principal faster
  • Keep your mortgage payments high - When the time comes to renew your mortgage, keep your mortgage payments high even if you're tempted by lower interest rates and a lower monthly payment. If you stick to your original plan, you'll pay off your mortgage faster and enjoy huge interest savings over the life of your mortgage.

Buying a home is one of the biggest financial decisions you will make. We will help you make decisions to pay it off faster!

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