Concerned about the amount of interest you will pay over the period of your mortgage?
There are a number of easy techniques to save you interest $$. By making extra payments on your principle, you will greatly reduce the number of years it takes to pay off your mortgage., These ideas are just a few pointers on how to you can save loads of cash!
- Shorten your amortization period: Probably the most straightforward method of saving on interest. For a $100,000 mortgage at 3% interest, by reducing your amortization to 20 years, you increase your payment by only $80, and save over $9,000 in interest! Reducing to 15 years creates an additional payment of aprox $210, but saves you aprox $17,000 in interest.
- One-time payments: Do you often receive cash as gifts? Some people find it easier to put “extra” money against their mortgage. Tax returns are a classic example of extra money that can be used as one-time payments. By contributed $1200 annually to a $100,000 mortgage at 3%, you save $11,149.65 in interest, and reduce your mortgage by 5 years and 11 months
- Rounding up your monthly payments. Simple strategy that allows you the flexibility to “round-up” however you see fit, but the result is essentially the same.
Bottom Line: Any additional monies placed on the mortgage creates compounding savings, and shorten mortgage period.
The trade marks displayed on this site, including CREA®, MLS®, Multiple Listing Service®, and the associated logos and design marks are owned by the Canadian Real Estate Association. REALTOR® is a trade mark of REALTOR® Canada Inc., a corporation owned by Canadian Real Estate Association and the National Association of REALTORS®. Other trade marks may be owned by real estate boards and other third parties. Nothing contained on this site gives any user the right or license to use any trade mark displayed on this site without the express permission of the owner.
powered by WEBKITS
