When do you expect to be mortgage-free?

A recent survey suggests that the average Canadian expects to be paying off their mortgage well into their 50s. For the average home owner, however, this likely isn't the ideal situation. As assisting children with post-secondary education, renovating, or planning for retirement start to be higher on the priority list, those who took steps to pay down their debts aggressively early on will be better prepared for these financial challenges. Luckily, there are several easy ways the average Canadian can reduce their mortgage amount faster, and take those first steps towards financial freedom.

Most mortgages allow the borrower to pay a certain amount (normally 10%) of the outstanding mortgage principal outside of their regular mortgage payments per year without penalty. If you have a large tax refund coming your way, why not apply it to your mortgage? Using "found" money to chip away at your principal is just one way to pay it off faster.

It has been recently reported that an increasing number of Canadians are accelerating their monthly payments in order to shrink their mortgage sooner. Many lenders will allow increasing payments by a certain percentage, just be aware of possible penalties if you decide to change it again within the same calendar year. Another easy way to achieve this goal is to switch from monthly payments to accelerated weekly or bi-weekly, or maintaining your regular payments when renewing your mortgage at a lower rate. Every small step can add up to a big difference!

For more information on how you can pay your mortgage off faster, talk to an Ottawa Mortgage Broker.