Posted by: Daryl & Wendy Ashby | July 27, 2011

Ways to Pay Your Mortgage Off Faster

Canadians would like nothing more than to be rid of their mortgage debt, according to a new poll released by Scotiabank. 

 Almost half of Canadians (46%) are saddled with mortgage debt; of those with a mortgage, a staggering 86% indicate that it is important to pay their mortgages expeditiously.

“Many Canadians know ways to reduce the life of their mortgage – such as increasing, matching or making additional payments – but it can often seem difficult to implement, especially if your budget is already stretched,” said David Stafford, Managing Director, Scotiabank Real Estate Secured Lending. “What many Canadians may not realize is that even small changes can shave years off a mortgage. “

The key to reducing what for many is their largest debt, is to have a strategy in place. Stafford reminds mortgage holders to utilize methods like making bi-weekly mortgage payments instead of monthly to shorten amortization and reduce interest over time; increase payments over time, if budget allows for it, and increase payments slightly year-over-year.

Also, Stafford suggests employing a strategy not only for paying down debt- but for taking on debt as well. There is much focus on deciding how you are going to pay down debt- but it only makes sense to plan ahead when taking out debt as well. 

In doing so, the debt holder is able to only take out the debt that they need, and to contribute as efficiently as possible to paying it down quickly.

Most Canadians are already taking advantage of bi-weekly payments- 46 % choose to make payments every other week. However, there are still nearly four-in-10 (38 %) Canadians who are making mortgage payments either monthly or semi-monthly.

Similarly, many Canadians are already taking advantage of options to make additional payments wherever possible: “The study showed that the majority of Canadians (65 %) are able to make additional payments on their mortgage and 75 % of those actually do it. One-third of Canadians (33 %) make additional payments whenever they can afford to, one-in-five (20 %) make additional payments annually and 8% make extra payments monthly.

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