21 July 2014
Only over half of the respondents decided to benefit from the current low interest rates in order to pay down their loans faster.
To be precise, 55% put extra effort into repaying mortgages, which is 13% lower than a year ago.
According to CIBC, even small efforts can help you save a lot in the end.
For example, a borrower has a $250,000 mortgage with 25-year amortization and 4.99% interest rate. By adding only $147 to his $1,453 monthly payment, he can save as much as $35,000 of interest.
Another way is paying $726 every two weeks without waiting for the end of month to make a mortgage payment. As a result, the borrower will save $30,000 on interest. The bank said even annual lump sum payment (e.g. $1,600) will save $33,103.
If you really want to become mortgage-free sooner, it’s extremely important to view your mortgage as a vital part of your total financial picture and to make your mortgage payment plan thoroughly.
This online survey was conducted with 1,509 Canadian adults during the period from May 21 to May 22.