The remaining time or amortization for the average mortgage holder in Canada; and how to get your mortgage paid off as soon as possible!
According to Canadian Mortgage Trends and the findings on a BMO report the average remaining time for a Canadian mortgage holder, surprisingly, is only 15 years.
Here are some other interesting stats found in the same report:-Only 12% of Canadians have more than 25 years left to pay their mortgage off. A larger number of these mortgage holders live in B.C. where prices are much higher than the national average.
-24% of people who hold a mortgage don’t make any additional payments other than their basic mortgage payments
-21% make lump sum prepayments
-43% prefer to increase their mortgage payments over time
-58% of those making lump-sum prepayments can afford only a 10% lump sum payment or less
It’s not uncommon for people to make a large lump-sum prepayment right before breaking their mortgage term in order to reduce their balance for penalty calculations. At RBC we automatically calculate that the 10% prepayment amount allowable whether you make it or not in order to reduce any prepayment charges at that time.
The more you take advantage of all the available prepayment options including lump sum payments, double up payments and accelerated payments the more you'll lower your total cost of borrowing. History has shown that people who have taken advantage of these additional payment options have paid their mortgages off, typically, in two-thirds of the time it would have normally taken.
Check out the RBC ONLINE MORTGAGE PAYMENT CALCULATOR to run a few scenarios on your existing mortgage or a new mortgage that you may be considering on taking out. If you have any questions please let me know.
Tony Marchigiano | Mortgage Specialist | Royal Bank of Canada T. 604-505-7109 | F. 778-737-0054