Keep more cash at hand at the end of every month.
If you’re reading this article, you likely have a high monthly mortgage payment but, you want to reduce this payment.
The home you bought should not be a burden.
Having a high monthly mortgage payment can cause significant stress that can impact your quality of living and affect your family if you have one.
Here are five ways you can reduce your monthly mortgage payments in Canada.
When purchasing a property, a down payment of 20% or more could help you avoid mortgage default insurance which can cost thousands of dollars.
More importantly, buying a house with a larger down payment will reduce the overall amount you want to borrow.
That will also save you interest fees over the life of your mortgage.
If you are currently a homeowner, it is also very likely that current rates are lower than when you first signed your mortgage agreement.
Refinancing your mortgage with the present-moment lowest interest rate will allow you to reduce your ongoing monthly payment and keep more cash in your pocket at the end of every month.
You should be aware that refinancing your mortgage has a penalty your previous lender will charge to break your mortgage.
The penalty is typically a three-month interest rate differential.
You should do the math and consider if a three-month interest penalty will be cheaper in the long run. — and commonly, it is!
Before your renewal is up, discuss with your mortgage broker the difficulties you face with your current mortgage payments.
Negotiate a different mortgage term. For example, ask your broker if you can qualify for an Open, Close, Fixed or Variable mortgage.
You may also tell your broker what you would like to pay based on your preferred affordability.
Mortgage brokers may find or match you with a suitable home loan or mortgage products.
A reverse mortgage is a type of mortgage solution that requires no monthly mortgage payments.
By securing a reverse mortgage, you can access up to 55% of your property value.
The only thing to remember is that you have to be over 55 years old to qualify.
In some cases, it may be cheaper to move into a smaller or less expensive home if you do not fully utilize all the space you currently have.
Downsizing into a less expensive home can be easy and will save you money.
When downsizing, there may be transactional costs, such as:
In the long run, you could save thousands of dollars with a lower mortgage and property taxes.
Get Approved Regardless Of Your Current Situation