We like mortgage products that allow our clients to pay their mortgage down faster (prepayment). After investing (wisely) into your RRSP, we believe paying your mortgage down is one of the best financial decisions you can make.
We also know it’s one of those things that can easily ‘slip your mind’. You’re busy enjoying your summer vacation; you’re planning for Christmas; you’re recovering from Christmas bills; new ski equipment; you need to shed the winter rainy blues and get away for a week in March; and then you’re planning for summer vacation again.
Just like anything else that is ‘good for you’, you’re much more likely to make your mortgage a priority if you keep it top of mind and use systems to make it automatic. Here are a few quick, simple things you can do to set yourself up for mortgage prepayment success:
- Sign up for our monthly mortgage newsletter. You don’t have to read it at all. You’ll just see our name in your inbox every month and it will remind you to think about your mortgage.
- Use automatic savings programs. Many banks offer free savings accounts and the ability to set up free scheduled transfers from your chequing account into the savings accounts. Tangerine (the former ING Direct) is one I’m personally familiar with, and it’s dead easy to set up a schedule that will take $100 from your chequing every payday and squirrel it away in a savings account called something subtly like “Mortgage Prepayment – DO NOT TOUCH”. Every 6 months (or on your anniversary date) put this towards your mortgage as a lump sum prepayment.
- Aggressive schedule your payments. You should absolutely set your scheduled payments higher than the minimum required. Round up to the nearest $10 or $100. It’s painless, it’s automatic, and every little bit helps.
- Schedule mortgage checkups. You are much more likely to stick to a plan, to meet a goal, if you’re accountable to someone else. You make it a higher priority when you know you’re going to report back to someone and say ‘yes, I succeeded’ or ‘no, I failed’. Part of our service is to make sure you stay on track with your mortgage goals. Tell us what you want to achieve and we’ll develop a plan and help you succeed.