More often then not, mortgages in Canada are amortized over twenty five and thirty year terms. I know! Twenty five to thirty years seems like a long time. Luckily, it does not have to take that long to pay off a mortgage if one chooses to do so in a shorter period of time.

With a some pre-planning, and a bit of diligence, most can manage to pay off their mortgage quicker by taking positive steps such as:

• Making mortgage payments each week, or bi-weekly. Both options lower your interest paid over the term of your mortgage, and result in the equivalent of an extra month’s mortgage payment per year. By making weekly, or bi-weekly payments you can reduce your mortgage from 25 years to 21.
• When you income grows, increase your mortgage payment. Let’s say you get a 10% raise each year at work. If you put that extra 10% of your income towards your mortgage, your mortgage balance will drop quicker without feeling like you’re changing your spending habits.
• Just about everyone finds themselves with money they were not expecting at some point or another. Therefore, take advantage of your pre-payment privileges. Mortgage lenders allow you to make extra payments on your mortgage balance each year. Apply this money as a lump-sum payment towards your mortgage. Your lump-sum payment goes directly towards paying down the principal amount of your mortgage.

By consistently applying these strategies, over time, you will save money, pay less interest, and pay off your mortgage much sooner.

All the best,

-D