We’d like to share a few simple mortgage strategies that can make a meaningful difference over time. While interest rates tend to get most of the attention, some of the biggest mortgage savings come from small decisions made throughout the life of the mortgage.
Many mortgages come with flexible features that often go unused. Taking advantage of them, even occasionally, can reduce interest costs and shorten the life of your mortgage more than most people expect.
- Increase Your Payment Slightly
Most mortgages allow you to increase your payment by up to 15–20% without penalty. Even a small adjustment can make a noticeable impact.
For example, adding an extra $100 per month goes directly toward the principal, helping reduce the balance faster and lowering the amount of interest paid over time.
- Use Your Annual Lump-Sum Privilege
Most lenders allow you to make a lump-sum payment each year, often up to 15–20% of the mortgage balance.
Applying bonuses, tax refunds, or extra savings toward your mortgage can significantly reduce the principal, which in turn lowers the interest being charged going forward.
- Review Your Mortgage at Renewal
When a mortgage comes up for renewal, many homeowners simply sign the offer their lender sends.
However, renewal is a great opportunity to review your options. As a broker, I can help guide you through the renewal process and shop the market to ensure you’re still receiving a competitive rate and the right mortgage structure for your needs.
- Adjust Your Amortization at Renewal
If your financial situation has improved since you first took out your mortgage, shortening your amortization can be a powerful strategy.
Moving from a 25-year amortization to 20 years may increase payments slightly but can significantly reduce the total interest paid over time.
- Check In on Your Mortgage Periodically
Life is always evolving, and your mortgage should evolve with it.
That’s why we reach out periodically throughout your term. It’s a simple way to make sure your mortgage is still aligned with your financial goals and to identify any opportunities to improve your overall strategy.
Small adjustments can make a big difference over time. If you ever want to review your mortgage or explore your options, we’re always happy to help.
