Whether or not paying down your mortgage quickly is in your best interests is a conversation that you should have with the financial experts who are advising you. From my point of view, it always makes sense. If interest rates go up, or if there is a dip in the market, or for whatever reason your Guelph property doesn’t appreciate as you had hoped, at least you’ve got more equity in your home and that is always a good thing. That’s my perspective.
If you determine that paying down your mortgage quickly is a priority, here are seven ways to fast-track your repayment schedule: 
- Shop around. There was a time when, if you needed a mortgage, you headed down to your bank branch and filled out the paperwork. Those days are gone. Comparison shopping simply makes sense when it comes to mortgages and you do not need to get a mortgage from the same institution where you conduct your day-to-day banking.
- Give brokers a chance. Maybe your bank will give you the best rates, terms, service, etc. I can only speak from my experience and say that it was only when I pulled my mortgage from a bank that suddenly I got a phone call and was told how valuable my business was – and could I please tell them my new rate so they could match it… something they weren’t prepared to do when I approached them initially. That’s not how I do business. I stuck with my broker. Get references, ask questions, and choose your broker wisely. Then, let them do the leg work to contact multiple lenders to find you a mortgage with the best rate and terms.
- Pay attention to terms. Low rates are great, but other terms are really important – including flexibility on extra payments, the ability to move your mortgage to another property if needed, and any pre-payment penalties.
- Consider an aggressive payment schedule. Setting your mortgage payments up on a bi-weekly or weekly basis (vs. standard monthly payments) results in extra payments every year. Over the course of your mortgage loan, it’s a tactic that can save you thousands of dollars in interest and take years off your mortgage.
- Lock in at the right time. Work with a mortgage professional who can advise you when the time is right to lock in your interest rate. Even a small difference – a quarter of a per cent in interest, for example – can signify many thousands of dollars over the life of your mortgage.
- Explore the option of refinancing. Work with a mortgage professional you trust and, if your current mortgage rate seems high by today’s standards, ask them to run the numbers to determine if a refinance makes sense. With penalties and fees, it may not – but it’s worth your time to at least consider the option. (PS: If you do save money per month on a refinance, consider keeping your payments as they were at the higher rate.It’s an easy way to make a dent in your principal and your budget already factors in the higher premium.)
- Consider ‘fun money’ mortgage money. Use gift money, tax returns, and bonuses for the purpose of making extra payments on your mortgage. I know, I know. What could be less fun than taking gift money or tax return money and giving it to a lender, right? But if money comes in that you don’t “need” and which isn’t accounted for in your budget, it makes sense to apply it to the principal of your mortgage. You could ease into this approach by considering it a one-year experiment.
For most of us, being mortgage-free feels like a fantasy – but it doesn’t need to be. Really, it just comes down to priorities. Do your homework, with with trusted professionals, and make your mortgage a top financial priority and you will achieve mortgage-free status faster than you might think.
