“You weren’t born just to pay your bills.”
You’ve probably heard this saying before, and found yourself relating to it in some way. It’s easy to get stuck in the paycheck-to-paycheck lifestyle habit and just cover the bare minimum on your bills for months or even years at a time. When was the last time you made a new savings goal? And actually achieved it? Chances are, something else is going to come up and get in the way. The dishwasher breaks. The truck needs a repair. Your best friend just booked a destination wedding in Hawaii. Life happens.
As much as you would like it to be, paying down your mortgage may not always be the priority. But what we often forget is that your mortgage isn’t just a transaction. It’s not just another bill to pay. When you choose your mortgage, you’re choosing a lifestyle. And just like nothing in life lasts forever, you shouldn’t feel shackled to your mortgage. So, how do you pay off your mortgage faster? Here are five key steps to get you started…
For example: A $300,000 mortgage paid on a monthly basis with a 3 per cent interest rate over 25 years will cost you $125,920.44 in interest. However, if you increase your payment frequency to accelerated bi-weekly payments, you will shave nearly three years off of your amortization schedule, and save $16,058.57 in interest.
Let’s say your accelerated bi-weekly mortgage payments are $543, but you choose to round up to $600 instead. The extra $57 will do wonders for your mortgage, and chances are you will barely notice a difference in your monthly budget.
For example, an annual lump sum payment of $250 on a $400,000 mortgage at 3.50 per cent over 25 years, combined with a bi-weekly payment frequency, will decrease your mortgage amortization by over 3.5 years.
While paying down your mortgage early will mean less interest paid over the lifetime of the loan, and a shorter amortization schedule, it’s not always the best decision for every homeowner. We’re here to help. When you work with Rampone-Marsh Mortgages, the relationship doesn’t end once the papers are signed. We’ll keep you advised of your progress, consistently helping to improve your personal wealth with sound feedback and advice throughout the life of your mortgage. Get in touch to learn more. We love helping our clients save money!