If you really want to make a dent, then aside from simply increasing your regular mortgage payment you can use your lump sum allowance.
This is for people who are really serious about getting their mortgage down. If you budget your life and know your expenses and savings goals, or you just know that you have some extra money at the end of the month, or year, then you can opt to put a little more on the mortgage without upsetting your monthly cash-flow.
This, like any other form of savings takes discipline, but unlike savings it is not as easy to take it out again so it is a much bigger commitment. The impact can be huge.
In the last piece I showed you how increasing your regular payments had the combined effect of lowering the balance, reducing the total interest cost and reducing the time you actually have a mortgage. While this is not great for my business it probably will be great for your future. Even if your current payment is as low at 1,000/month, think about what that extra thousand can do for you.
The trick for a lot of people though is foregoing what they want today for the future, and in fairness, living life is important so I am not advocating being house poor and not enjoying life, I am suggesting moderation because the debt figures suggest that too many of us are leveraging too far the other way.
Look, if Canada's richest man, when he was alive, could pack a lunch to take to work, then you have to question how someone struggling to pull it all together can justify a regular trip to a fancy coffee place.
So, consider even taking a few lunches to work and putting the savings on your mortgage, topping up your RRSP, or RESP or whatever form of savings make sense to you, every dollar counts. Or put a little on each.
Personally, as you know I hate debt, but of all debts I do understand and appreciate mortgages, not just because I now help people get them, but because they make owning a home possible for so many.
Next piece is on why I like property.
