Carla still remembers the day she got her first mortgage. She had just fulfilled her dream of buying a house, but she was also embarking on a long financial journey. Like many new homeowners, she wondered if there were ways to ease the burden and pay off her loan faster. Over time, she discovered several strategies to achieve this, and today she wants to share them with you.

 

Here are some tips that Carla applied  to pay off her mortgage faster. Through these simple tips, she was able to save time and money, and you can do the same!

 

Carla learned that making early repayments on her mortgage was one of the best ways to reduce the loan's principal and the interest to be paid. Each year, she could repay up to 20%(depending on the financial instituion) of the initial loan amount, which significantly shortened the life of her mortgage.

 

• Direct reduction of the borrowed principal.
• Shortening of the amortization period.
• Savings on interest.
• Flexibility to make lump-sum payments  starting at  $100.

Carla then decided to slightly increase the amount of her monthly payments. Even adding just a few extra dollars made a big difference in the long term, as this money was applied directly to the principal.

 

• Reduction of the loan balance.
• Acceleration of mortgage repayment.
• Flexibility to increase payments according to your capacity.
• Ability to revert to the original payments if needed ( depending on the financial institution)

Another effective method Carla adopted was switching to accelerated bi-weekly payments. Instead of making one monthly payment, she made two payments per month, which equated to an extra month's payment each year.

 

• Significant reduction in the mortgage term.
• Major savings on interest.
• Option to switch to accelerated payments at any time.

When her mortgage was up for renewal, Carla decided to shorten the loan term. While this slightly increased her monthly payments, she knew she would save thousands of dollars in interest over the long term.

 

• A $175,000 loan amortized over 25 years at a 4% rate.
• Reducing the term by 3 years increased monthly payments by $106.50, but saved nearly $17,000 in interest.

Thanks to these strategies, Carla is well on her way to paying off her mortgage much sooner than expected. If you’d like to explore these options and find the one that suits your situation best, don’t hesitate to contact me. Together, we will find the best solution for you.

 

Give us a call today and we’ll put our experience to work in helping you find the perfect solution!