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Canadians Putting Extra Towards Their Mortgage

July 25, 2014

Encouraging Signs; Over Half of Canadians Actively Putting More Towards Their Mortgage

A survey conducted by Angus Reid found that Canadians expect to be mortgage free by the age of 58, comparable to the same study last year which revealed Canadians expectations to be mortgage free by 57.

One of the most interesting findings of the survey was that over fifty-five percent of Canadians indicated that they were putting in money into their mortgage over-and-above their regular payments.

Household debt and Canadians indebtedness has recently become a staple in many newspapers and media channels; Canadian household debt-to-income ratios being an oft-cited statistic by the Bank of Canada and a key component in Bank of Canada’s decision making policy.

Often times, borrowers look at historically low mortgage rates and come to the conclusion that their money might be better put elsewhere than against an interest rate around 3%, while this is typically true when it comes to paying down high interest debt such as credit cards, the guaranteed return you receive from paying down your mortgage is an especially positive choice.

There are a number of strategies that fiscally prudent home-owners can employ. Some home-owners choose to pay their mortgage as if they held a 5% interest rate, some Canadians pay their mortgage in accelerated bi-weekly payments (as opposed to the regular monthly payments) and other home-owners increase their monthly payments each year by a few percentage points – regardless of the method, the additional money put towards a mortgage certainly has an impact in the amount of money saved in interest payments.

The poll was taken by approximately 1500 home-owners in Canada and took place this May.