3 Ways to Reduce the Burden of Your Mortgage
posted in Mortgage News
Paying off a mortgage quickly is something that most Canadians would love to be able to do, and being debt-free is a dream for us all. Not only is mortgage debt a financial burden, but it’s one that can put intense stress on you in many other ways, too. Securing your financial future becomes so much harder when your mortgage payments take up most of your monthly income for 25 years, and planning and saving for your retirement is increasingly tough if mortgage rates keep rising. Pay your mortgage off quicker, however, and you can begin to free up money that could be spent more wisely, such as on retirement savings.
With mortgage debt hitting record highs in Canada, is it time for you to start reducing your mortgage debt? If yes, then check out the following 3 ways to do exactly that:
- 1. Increase the amount you pay every month
This is quite simply, one of the most effective and easily achieved way of reducing your mortgage debt, and over time, when you increase the amount you pay each month, you’ll significantly reduce your mortgage balance; and this is true even if mortgage rates rise. One example would be if you increase the amount you pay by an extra $100 per month, you can reduce your mortgage term by six to eight months based on a mortgage debt of $180,000 at 6%.
- 2. Increase the frequency at which you make payments
While this can undoubtedly be a highly effective strategy for many Canadian homeowners, there are some considerations you should carefully think about before deciding to start paying your mortgage off faster by increasing the frequency of payments:
- • Having a mortgage payment schedule with a due date set, can be beneficial
- • Your mortgage payment schedule cannot be changed
- • If your mortgage isn’t amortized over 25 years, leaving you with little mortgage debt stress, this strategy may not be as effective
- 3. Consolidate your loans
One other way of paying your mortgage off faster, is by setting up a number of mortgage debt consolidation loans. If you have a lot of high-interest credit card, for example, you can consolidate it along with any other high-interest debts into a mortgage loan. Then, you’ll be able to pay one loan with monthly payments at a lower rate of interest.
If your mortgage is becoming too much of a burden for you to bear, why not talk to a mortgage broker about some of the ways to pay it off faster, and free up some much needed cash.