Pay your mortgage faster!
In generations past, there seemed to be more of a focus on paying down your mortgage as quickly as possible. In my generation, between the cost of real estate (which has absolutely ballooned in some centres, like Vancouver and Toronto) and super-low interest rates, being mortgage free is a lofty idea that resides in the distant future.
However, you are in control of your mortgage- and you can ultimately control the timeline before you own your house outright.
Here are some ideas to pay down your mortgage faster.
Switch to Bi-Weekly Payments
Do you get paid bi-weekly? Switch up your mortgage payments to match your pay cycle (even if you don’t it’s worth adjusting your budget to make this work).
You get a few extra payments a year- which goes far in the long term to whittle away at that housing debt.
Celebrate Your Anniversary
And no, I don’t mean a romantic dinner with your significant other. Many lenders will allow you to make a lump sum amount on the anniversary (or once a year) of your mortgage without penalty (although there are usually restrictions around how much you can make).
Increase Your Mortgage Payments
Some lenders let you alter your payments at any time without penalty (some charge you, but you can clarify that with your lender. Consider increasing your mortgage payments to speed things up. Adding a small amount that won’t impact your cash flow month to month can really take a good chunk out of your debt for you.
Careful not to overextend though! You want to make sure that you have some wiggle room in terms of your payment commitment, should something change.
Reduce your Amortization
This is similar to the increasing of your mortgage payments, but actually requires a re-writing of the loan (which means you may be charged an interest penalty if you don’t do it at renewal).
Typically, mortgage loans are amortized over 25 years. If your budget allows for you to pay more, with ample wiggle room, then go for it. The shorter your mortgage, the less interest you will pay over time.