Four little ways that can help you kill your mortgage off in a BIG way!

Considering that at the heart of what we do is to help clients become financially free (or at least better off from a net worth perspective), it’s a bit ironic that we help clients acquire property via mortgage loans… That’s only step 1. Step 2 is really educating borrowers on how to pay their mortgage off before their contract says they can.

Here are four small-but-effective ways that you can save on your mortgage beyond just having a low rate:

1) Make accelerated payments instead of regular monthly payments. The calculation of simply switching your payment frequency from Monthly to Bi-Weekly Accelerated on a $200,000 mortgage (4.00% interest rate, 25 year amortization) would only save you $614.53 in interest over 5 years, but you would kill off an extra $5,874.73 of the principal balance of your mortgage in the same time period. The faster your mortgage is gone, the better off you are!

2) Spending $4 per day on your mortgage: that’s only $120/month, or $1440 per year as ‘forced savings’ if you upped your minimum payment OR put it down against the mortgage as a lump sum annually. There isn’t a GIC or government bond out in today’s market that would provide you with the same rate of return as your mortgage is costing you!

Along the same lines, think of maybe rounding off your monthly payments to the next hundred-dollar figure. Your mortgage commitment may show that your payment only has to be $835.63 per month, but would you REALLY miss the extra ~$64 per month from your ‘arbitrary spending fund’ if you were to round your mortgage payment off to $900 monthly? Probably not, but you won’t miss your mortgage once it’s gone, now will you?

3) Roll your RRSP and overall tax refund, pop bottle return fund and other ‘extras’ into an annual lump sum downpayment. Chipping away at your mortgage’s principal bit by bit may not feel like a big ‘win’ each time that you do it, but the end result could be that you finish paying the mortgage off in 15 years instead of 25.

… and at that time, what would you be able to do with another $900 per month?

4) Don’t settle for the rate that your current lender throws your way as your mortgage term comes to an end. We wrote a similar post a few months back that covers the ins and outs of how just signing on the dotted line can cost you thousands.

Want to get a free, non-obligational check-up on your mortgage and learn about how much you can save? Contact us today and we’ll help you on your way to becoming mortgage-free sooner than you knew were possible!

Committed to your financial success,

James C. Tworek and the Trimor team!

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