Mortgage payments can be a major source of financial stress for Canadians. The good news is that making additional mortgage payments can help ease this burden. Not only will you pay off your mortgage more quickly, but you can also save money in the long run by reducing the amount of interest you are charged. Here are some of the main benefits of making additional mortgage payments in Canada.
- Pay Off Your Mortgage Sooner:
The most obvious benefit of making additional mortgage payments is that it will help you pay off your mortgage sooner. By making additional payments, you are essentially paying more money towards the principal balance of your loan each month. This means that you will be able to reduce the amount of interest you pay over the life of the loan. It can also help you pay off your mortgage sooner, potentially saving you thousands of dollars in interest over the life of the loan. - Lower Your Interest Rate:
Making additional payments on your mortgage can also help you secure a lower interest rate. This is because lenders take into account your repayment history when determining the rate they will offer you. If you are consistently making additional payments on your mortgage, lenders will be more likely to offer you a lower rate. This can result in significant savings over the life of the loan. - Reduce Your Debt:
Making additional payments on your mortgage can also help you reduce your overall debt. By paying more towards your mortgage each month, you are essentially reducing the amount of debt you have. This can help you improve your credit score and can also make it easier for you to qualify for other loans in the future. - Build Equity:
Making additional payments on your mortgage can also help you build equity faster. Equity is the difference between the value of the home and the amount you still owe on the mortgage. By making additional payments, you are essentially paying down the principal balance of the loan, which will increase your equity. This can be especially beneficial if you plan to sell your home in the future.
Overall, making additional payments on your mortgage can have a number of benefits. By doing so, you can pay off your mortgage sooner, reduce your debt, and build equity faster. It can also help you secure a lower interest rate, which can save you a lot of money over the life of the loan. So if you’re looking for ways to save money on your mortgage, making additional payments can be a smart move.