This was the heading of a recent article in the Globe & Mail. As similar article was written for Canadian Mortgage Trends. The main topic was taking advantage of pre-payment options that are available with some mortgages. These pre-payment features give you the benefit of paying down your mortgage faster which is the key to shortening the life of your mortgage and paying thousands of dollars less interest. The most important thing to keep in mind when borrowing to buy a home is Total Cost of borrowing. A good and competitive rate is important but having payment flexibility and pre-payment options are just as important as it will reflect your over all "total cost of borrowing"
Mortgage rates today are about half of what they were in 2007. Most people just pay their regular payment amount at today's current rates but what if you calculated what your payment amount would be a rate that was available in 2007 and change your payment amount to that. Or even increase your payment by $100.00 a month. The effects can be dramatic and this would be a perfect time to do so. When rates are low you pay a lot less interest but if you make additional payments you'll see your mortgage balance drop even quicker!
Speak to your Mortgage Advisor or Financial Planner to see if this would make sense for your short and long term goals.
If you have any questions regarding this information or any advice around it please give me a call.
Tony Marchigiano | Mortgage Specialist - Mortgage Sales BC Region, RBC Royal Bank | Royal Bank of Canada | T. 604-505-7109 | F. 778-737-0054
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