This is a simple strategy that is always worth repeating. A caller on our Hot Property Show was confused by the mortgage solution her bank was offering her. She wanted to pay down her mortgage quickly but was hesitant about choosing a variable rate mortgage product. The typical “banker”, rather than laying out the right mortgage strategy to meet her specific mortgage needs, decided to do what they always do, convince clients to lock into a long term higher fixed rate mortgage product.
What’s the strategy?
If you are in a position to afford to pay a monthly mortgage payment based on fixed rates than I encourage you to GO VARIABLE and watch your mortgage go down faster. Basically, you get a variable rate mortgage but pay your monthly fees at the higher fixed rate amount. This way you are paying yourself by paying down the principal vs. than paying more towards interests payments and contributing to your bank’s bottom line.