{"id":213,"date":"2017-05-12T05:01:22","date_gmt":"2017-05-12T09:01:22","guid":{"rendered":"https:\/\/www.ratetrade.ca\/blog\/?p=213"},"modified":"2023-03-20T12:59:14","modified_gmt":"2023-03-20T16:59:14","slug":"5-ways-pay-off-mortgage-early","status":"publish","type":"post","link":"https:\/\/www.ratetrade.ca\/blog\/5-ways-pay-off-mortgage-early\/","title":{"rendered":"5 Ways to pay off your mortgage early."},"content":{"rendered":"

5 Ways to pay off your mortgage early :<\/strong> Purchasing a house in Canada is not easy until you have a mortgage that suits your needs and paying off your mortgage as early as possible is one of the best decisions you will take.<\/p>\n

According to a study conducted in 2010 by Canada Mortgage and Housing Corporation (CMHC) 68% of the Canadians felt that that could pay off their mortgage earlier than their current amortization period out of which 27% have either made lump sum payments towards the mortgage or have increased their regular payment amount.<\/p>\n

Paying off a mortgage early comes with benefit where you save a lot of money on the interest paid towards your mortgage and saved money on interest can be invested somewhere else to get better return.<\/p>\n

Below listed are 5 ways you can pay off your mortgage early:<\/h3>\n

Frequency of payments:<\/strong>
\nChange your monthly mortgage payment<\/strong> with a bi- weekly payment where you make 26 payments a year towards your mortgage and which will help you pay your house at least 3 years before the schedule term of amortization as compare to monthly payment..<\/p>\n

Our calculator payment calculate<\/a> will help you analyze how the frequency of loan payment can help you pay.<\/p>\n

Example: $300000 loan paid on a monthly basis with 3% fixed rate of interest with amortization of 25 years when switched with bi-weekly payment will save $160,58.57 in interest and help you pay off you loan early<\/strong> .<\/p>\n

Loosen up payments:<\/strong><\/h3>\n

Small drops make an ocean is a common saying, in a similar manner every extra dollar paid towards loan payment makes a huge difference. For example, if your bi-weekly payment comes to $589 round it off to $600. Cut down on unwanted expenses to meet the necessary ones and this small change towards loan payment will help you pay off loan early.<\/p>\n

Lump sum mortgage payment;<\/strong><\/h3>\n

Most of the banks give you an option to make a lump sum payment once a year that is goes directly towards the principal.<\/p>\n

Example:<\/strong> When a lump sum payment of $250 combined. Bi-weekly payment system is made every year on a loan of $400000. An original amortization of 25 years then your amortization period will decrease by over 3.5 years.<\/p>\n

Divert unexpected money:<\/strong>
\nWhen you receive unforeseen sources of money like birthday cheques. Overtime bonus, tax returns, etc. opt for directly outsourcing the income to towards mortgage payment.<\/p>\n

Lessen your amortization period:<\/strong>
\nIndividuals opt for an amortization period of 25 years, especially on higher loan amounts. But if you reduce your amortization period, you will pay off your loan quicker.<\/p>\n

For example, if A& B have a mortgage amount of $400,000 at a fixed rate of 2.39% with an amortization period of 25 and 20 years respectively and bi-weekly payment structure<\/a>.<\/p>\n

A will pay $885 as compared to $1048 of B. But B will pay off nearly 24% of the in 5 years as compared to 18% of A as. When the amortization period is shorter, more amount goes towards principal payment in a lesser span of time.<\/p>\n","protected":false},"excerpt":{"rendered":"

5 Ways to pay off your mortgage early : Purchasing a house in Canada is not easy until you have a mortgage that suits your needs and paying off your mortgage as early as possible is one of the best decisions you will …<\/p>\n","protected":false},"author":1,"featured_media":631,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[189],"tags":[222,223,224],"class_list":["post-213","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mortgage-refinance","tag-5-ways-to-pay-off-your-mortgage-early","tag-mortgage-early","tag-mortgage-payment"],"yoast_head":"\n5 Ways to pay off your mortgage early - RateTrade.ca<\/title>\n<meta name=\"description\" content=\"you searching 5 Ways to pay off your mortgage early. 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