Most Canadians’ largest liability is their mortgage. Because mortgages accrue interest every month, it is important to every homeowner’s financial well-being to understand how interest works, and to implement and execute a smart payoff strategy, minimizing the amount of interest paid. Here are a few key pieces of information to know about mortgage interest.
When looking to reduce their monthly payments, many homeowners choose to lengthen their mortgage amortization from 25 to 30, or even 35 years. While this makes the monthly budgeting easier, mortgagors should be aware that it will also dramatically increase the total paid on the mortgage. In fact, most homeowners are shocked to hear the even if they take 25 years to pay their mortgage at an average interest rate of five percent, they will pay approximately 75 percent interest on the original sum borrowed!
Mortgage interest in Canada compounds twice a year, which means that twice a year borrowers are being charged interest on the interest on their mortgage. It adds up fast.
It is my job to properly educate my clients about every aspect of their mortgage and take the fear out of the process of borrowing large sums of money. Please give me a call (416.807.7123) to answer any questions or concerns you may have about the interest you are paying on your mortgage, or any other mortgage related topic.
You can also try emailing me at gbarrow@dominionlending.ca or visit my website (www.gregbarrow.ca) for more information, mortgage calculators or to sign up for my monthly newsletter.
No comments:
Post a Comment