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Buying a home is a big deal. It is the place where your children grow up, your friends visit and the cornerstone to your net worth. It is the biggest purchase you will likely ever make and your first step towards financial freedom and independence.
What’s even better than buying a home? Living in a home you fully own. Move out of mortgage payments and into controlling your financial future by paying off your mortgage, faster!
Get on the right path to paying off your mortgage, and potentially saving thousands of dollars in the process. Implementing these small strategies can give you more time and money for the things you love while setting you up for a future that is more financially stable.
If you are paying your mortgage monthly, consider changing to bi-weekly payments. It might not seem like a big difference, but consider this:
If your mortgage is $2,000 a month, you are paying 12 payments which will equal $24,000 a year. By paying $1,000 every two weeks, you will have made 26 payments a year. This means, at the end of the year you will have paid off $26,000 — that’s a difference of $2,000 more than if you paid monthly.
Owning your home is essentially financial freedom. It is a huge milestone and changes your monthly cash-flow and ability to save more than any other financial obligation. Get mortgage-free faster by paying more often, rounding up your monthly payments and topping off the principal.
Pay more frequently — Switch your monthly mortgage payments to an accelerated weekly or bi-weekly schedule and you can save thousands and pay off your mortgage faster.
Round up — Line up your mortgage payments with your paycheque and make them slightly larger. It will seem minimal, but you will be surprised at how much faster you’ll be able to pay off your mortgage.
Instead of paying $2,117.90 per month, round it up to $2,200 or if you’re able, $2,500! You likely won’t feel the pinch as much in your monthly cash flow, but you will notice the years it takes off your mortgage!
Top off — If you get a tax refund or a bonus, instead of spending it on new clothes, shoes or even a vacation, consider putting it against your mortgage. When you put lump sums against your loan you pay off the principal faster. This means in the long run you are paying less in interest, putting financial freedom in your near future.
Talk to us about your options to increase frequency or amounts on your payments to pave the way on becoming mortgage-free!
Since owning a home is likely the largest purchase you will ever make, it is common to apply for a mortgage with a partner. Multi-applicant mortgages have gained traction due to rising home prices. It means taking a mortgage out with another person, family members, or multiple friends. The responsibility of the loan and the mortgage is shared between all those that apply together.
Applying together can increase the odds of getting approved, can give you the opportunity to have a larger loan and decrease the amount you need for a down payment. It helps lessen the financial strain on one person and means you will share the upside if your home increases in value when you go to sell.
Saving money to put towards your mortgage all sounds good, but you might be wondering – is it possible to make more money to put towards my mortgage without compromising my lifestyle?
This strategy is called a ‘mortgage helper.’ It gives you extra money in your pocket to buy the things you want and live the life you’ve been planning, all while paying off your mortgage faster.
Mortgage helpers, also called secondary suites or rental suites, are a great way to boost your income and escape mortgage payments sooner!
Afraid of being a landlord? Don’t be. There are lots of tips and tricks to get good tenants. When you’re living in close proximity, you’ll be happily surprised at how easy it is to run your new suite.
When you’re looking for a house and come across one with a rental suite you can submit two years’ worth of rental data for the neighbourhood you are looking to buy in. You can add that rental income to your annual income and potentially boost the mortgage amount you could be approved for.
The Canadian Mortgage and Housing Corporation (CMHC) increased the percentage you’re allowed to declare of potential rental income from 50% to 100% when applying for a mortgage. Even with this change, remember to never over-extend yourself. The mortgage helper should be just that – a way to pay off your mortgage faster. Get the house of your dreams, within your affordability and then own it faster than you ever thought possible. Use our mortgage calculator to understand your buying power!
No matter if you are planning to take on a mortgage, on your own, with a partner or with several family members, you can make your mortgage add up to financial success faster with the right advice.
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