When it comes to mortgages, $100 isn’t going to get you very far. But what if you paid an extra $100 a month towards your mortgage? It’s not a lot of money these days, but it can add up to some solid savings over time.
Let’s look at a $300,000 mortgage with a 2.89% rate and a 25-year amortization. At the end of five years, you’ve paid off an extra $6,444. The balance owing is $249,435. And the remaining amortization is 17 years and 9 months instead of 20 years. This also represents an interest savings of $11,423 over the life of the mortgage. Not bad!
Now let’s look at paying an extra $200 per month. At the end of five years, you’ve paid off an extra $12,888. The balance owing is $242,991. And the remaining amortization is 15 years and 11 months. This represents an interest savings of $20,708 over the life of the mortgage! Continue reading “How can an extra $100 boost your mortgage?”
A couple in their 30s contacts me for a mortgage. They want to buy a new home. She’s a high school teacher and he’s a computer firm manager. Incomes are good. I check their credit.
Let’s stop here for a minute… If they have good credit, an approval is simple and we can provide the clients with several mortgage options.
But let’s assume that this couple ran into some debt and credit issues three years ago… and they made three different choices about how to resolve those credit problems: 1) Credit Counselling; 2) Consumer Proposal; or 3) Bankruptcy. I want to take you through each scenario and show you how long each of these three options affects your ability to finance a home. I bet the results will surprise you! Continue reading “Credit counselling, Consumer proposal or Bankruptcy… Which option is most favourable?”
Mortgage rates have never been lower. Should you break your current mortgage to take advantage of the lower rates? The answer is ‘yes’ and ‘no’.
YES….if the penalty to break your mortgage is less than the potential savings. We are seeing many opportunities today where it PAYS to break your mortgage and get into today’s lower rates.
EXAMPLE for one client.. Existing mortgage is $275,000. The existing rate is 2.99% with 3 years to go. The penalty to exit is $3500. The current 3 year rate is 2.24%. Gross savings is $5602. Net savings is $2102.
NO… if the penalty to break your mortgage is less than the potential savings. EXAMPLE.. Penalty is $6500 and Gross savings is $5602. Net loss is $898.
YES… if you think interest rates are going to be much higher in the next few years, you may still want to bite the bullet, pay the penalty and lock into a longer term fixed rate mortgage. Everyone is different and has different needs, risk tolerances, plans. This is a personal choice.
I’ve seen examples of both situations. You could save money by breaking your mortgage. The best advice is to speak with an experienced Mortgage Broker. Get an UNBIASED opinion.
Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.
Steve Garganis 416 224 0114 email@example.com
IS CHOOSING A MORTGAGE IS AS EASY AS BOOKING A TRIP OR TRADING A STOCK?…LET’S FIND OUT!
Sure, you can book a flight online or a buy a stock through the web. But, can you really choose the right mortgage product on your own? Can you really find the absolutely lowest cost mortgage financing option? I’ll bet some consumers can. I’ll also bet the vast majority cannot…. and there’s a steady stream of horror stories, on this news site and others, that show just how costly and financially dangerous it is to be in the wrong mortgage product, with the wrong lender.
I’ve shared dozens of those experiences on this site. Consumers who were directed into the wrong mortgage by their Banker or by some web site claiming to offer ‘the lowest rate’. I empathize with these consumers as I believe they were just trying to save some money but instead ended up paying far more than they had to. Continue reading “Online shopping for Stocks, Vacations and Mortgages. An In-depth comparison…”
A few years ago, I published a study on Rate shopping sites. These sites were gaining popularity with consumers as a place to go if you wanted to get the best rates. And they attracted a lot of attention.
You know the sites… they have catchy ads like ‘shopping for the Best Mortgage rates in Canada’ or ‘comparing Canada’s mortgage brokers for the best rates’.
Hey, who doesn’t want the best rate? These ads work. Canadians were clicking these links to get more info.
Sounds great, right? Yet, it’s not.
Continue reading “Rate shopping sites…tested again.. and failed again.”