How to Pay Less Interest When Mortgage Rates Are High!

couple looking at mortgage paperwork, happy with saving money on interest
In the words of Ralph Waldo Emerson, ‘Money often costs too much,’ and these words ring especially true in the current interest rate market. However, it doesn’t have to be this way.

While interest rates play an important role in determining how much your borrowing will cost you, there are ways to work the mortgage system to lower this cost through the various features your mortgage may have:

Biweekly accelerated payments

This simple trick allows you to make 13 months’ worth of payments in a 12-month period, with the 13th month going toward your principal.

Lump sum payments

Did you know that your mortgage lender will allow a lump sum payment of 10 and 20% of the original mortgage amount each year toward your principal? Consider using a bonus from work or any small windfall toward your mortgage balance each year before spending the money elsewhere.

Annual mortgage payment increases

Most lenders will allow you to increase your mortgage payment by between 10 and 20% each year. If you get a raise, consider putting a portion of it toward this option.

Double up payments

You can double your payment anytime you like during your mortgage term, with most mortgage lenders. 

Applying one of these options each year to your mortgage will lower your amortization by a number of years , and save you thousands of dollars in interest. This is money that will be freed up to invest and earn interest instead. Why not have the bank start paying YOU  interest instead!

For more details, please book an appointment with Paul by clicking here.


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