Trying to figure out how to pay less interest and be mortgage free faster ? At Avi Urban, we work with the experts to help you make the best decisions when buying your new home with us. One of these experts is Laura Parsons, Bank of Montreal Manger of Mortgage Specialists and Calgary Sun Columnist.
This week, Laura is back to help you figure out your choices for mortgage amortization:
· Figure out the rules: A few months ago, the rules for mortgages changed in Canada. “The maximum mortgage amortization period was reduced from 35 to 30 years and the maximum amount you can borrow…was lowered from 90% to 85% of the home value. I think most consumers are realizing that shortening your mortgage amortization is the smart thing to do.”
· Think small: “Shortening your amortization helps you save on interest payments over the life of your mortgage and enables you to pay down your mortgage faster.”
· Try a stress test: “We shouldn’t ignore the possibility of an interest rate increase. It’s always wise to stress test your budget using a mortgage payment based on a higher interest rate. This can help avoid any nasty surprises in the future.”
· Experts can make house calls: “Through education and advice banks provide to their customers, most Canadians feel they can still own a home with proper budgeting and financial planning. You should consider visiting a banker or inviting a mortgage specialist to come to your home for a comprehensive review of your home financing options.”
Choosing a shorter mortgage amortization rate can help bring down your interest payments and make you mortgage free faster. But that’s just one option. Check with a BMO mortgage specialist like Laura to learn how to choose the perfect mortgage for you.