11 Hacks To Pay Off Your Mortgage In 15 Years In Toronto
Yes! You can pay off your mortgage in 15 years in Toronto! Use these 11 hacks to pay off your mortgage early and save more money. It can be challenging to pay off your mortgage easily, but it is not impossible. I present to you the BEST HACKS which can help you pay off your mortgage in Toronto.
By the time you finish watching this video, you will have learned how to pay off your mortgage faster in Toronto, how you can save money on your mortgage, bi-weekly payments vs monthly, using extra money, and how you can easily pay off your mortgage in Toronto.
Hack number one: Add a rental basement apartment in your unit, yes adding a rental apartment or a room in your house will add extra rental income that will knock off years if not decades from your mortgage here\’s a secret tip rent out any extra parking spaces or land on your property.
Hack number two: Pay extra. I know this sounds weird but trust me if you make just one additional payment every year you can save thousands of dollars in interest this works because you can reduce years off of your mortgage.
Every bank allows you to pay up to 20 extra as a prepayment towards your mortgage utilize this as this would knock off years off of your mortgage.
Let\’s say your total mortgage is five hundred thousand dollars for a 25-year term with an interest rate of 1.74% with a 5% down payment, your monthly payment would be around two thousand dollars if you pay just fifteen hundred dollars extra every year.
Over and above your payments will shed about three years off of your mortgage and save forty thousand dollars in interest.
Also Check: Recently Sold Homes In Burlington Ontario
Can you believe that hack number three chooses bi-weekly payments? I tell all my clients this is super easy and very important
This hack includes the last hack by default a bi-weekly payment adds two additional weeks of payments to your annual mortgage so, now instead of making 12 monthly payments for a year you make 26 bi-weekly payments, meaning your yearly extra payment gets incorporated into your monthly budget and you get to save on the interest easy right.
Hack number four: Use your tax refund towards your mortgage. According to a report, in 2020 the average refund was a huge amount of 1860. I\’m not saying that you will get the same amount but let\’s assume that you use this 2 000 towards your mortgage payment every year, you are going to knock off about two years of your entire amortization.
This is amazing, a lot of people don\’t do this, you shredded two years off of your mortgage and saved a lot of money and interest.
Hack number five: 20% down payment. Did you know that your bank or lender charges you default insurance however, if you put twenty percent down towards the purchase price of a five hundred thousand dollar property, your default insurance would be waived?
This default insurance premium accounts for nineteen thousand dollars if you just pay this off, you would knock off one year off of your amortization of the mortgage.
Hack number six- Round up your payments I like this one it is super easy and very effective what you do is simply round up your mortgage payments to the nearest hundred dollars. Say your monthly mortgage amount is two thousand and fifty-five dollars, how about paying two thousand one hundred dollars.
You\’re paying just 45 extra each month but you can save about 10 000 in interest over the amortization of your mortgage this is insane, the numbers don\’t look attractive right now, I agree but consider adding these little numbers on top of your other hacks and it will make a huge difference
Click here: Bungalows For Sale In Whitby
Hack number seven: Increase your income. Sounds a bit offbeat as a hack but trust me there are so many ways in Toronto, you can start a side hustle and make some extra income.
Let\’s say you earn just 500 a month from your side business. Add it up for years and you would have made a whopping six thousand dollars as an additional earning per year.
You can pay part of this additional payment towards your mortgage and spend other parts for your other expenses I have a couple of friends who actually drive uber on their way home from work and they make a couple of hundred dollars every month.
You can partner up with cab services like Uber and Lyft and it is super convenient nowadays to drive these and sign up for them. If for some reason you do not want to let strangers in your car, you can sign up for food delivery services.
There are so many right now and so many different options to choose from. Toronto is the hub for these services and you can make a lot of money. Let\’s say, you\’re a photographer, you can sell these photos to stock companies online and make a recurring income from whoever uses them.
Not just that, you can indulge in DIY art and sell it online or share your knowledge with people online, for example, my main source of income is being a realtor but now that I have earned a lot of experience and knowledge in the real estate industry I\’m making these online videos and making the additional income you can do it too.
Hack number eight: Use your credit card to earn money. Can you imagine? Using your credit card to pay off your mortgage? Yes, you can, not from the money that you\’re going to pull out from the credit card but from the rewards that you\’re gonna make from credit cards.
There are a lot of credit cards from different banks such as [ __ ] scotia td tangerine that offer you rewards and cashback towards the amount that you spent on them.
I know how tempting it is to use these rewards and extra earnings towards purchases and other luxuries that you could spend but I say use this amount towards paying off your mortgage and save thousands in interest.
Hack number nine: Cut down on your expenses. Everyone talks about this, my parents have always told me to stop spending on luxury items, and spend only on what I need not on the things that I want.
There is a very fine line and you have to define what your needs are versus what your wants are. If you say, I need a PlayStation that is not correct you could want a PlayStation but you don\’t need it. Define your needs and wants and then make sure that your expenses are based on that.
Think whether you need subscriptions to all those streaming platforms I know I\’m horrible when it comes to these little things. I have so many subscription services that I don\’t even use it\’s insane is it necessary to buy expensive clothing every month maybe the answer is yes maybe it\’s no.
You define it here\’s a tip to help you reduce the stress of cost-cutting track your expenses yes, as simple as that the thing is if we don\’t track these things we do not have accountability and that\’s where all the problems start. We have no idea what we are spending each month.
You don\’t have to start cutting down the expenses right away just seriously start tracking them for a couple of months and you will automatically realize what you need to cut you will start noticing the patterns and will automatically find easy ways to stop the unnecessary spin.
Hack number 10: Create a budget, I know this is an extension of the last point that we talked about.
Once you have recognized the unnecessary expenses creating a budget will help you stay on track and give yourself a realistic amount of money for each type of expense based on your monthly income you know what I would like you to watch a video I had shared earlier on cost-saving tips and you will get the idea of how budgeting will help you save so much money.
Hack number 11 is downsizing an option for you maybe it is. Start with a low mortgage for a smaller property, this way you will not have to pay a ridiculous amount of money and spend a lot of time paying off your mortgage just because you\’re eligible for a 500 000 mortgage doesn\’t mean you should take it if you don\’t want to spend too much time paying off your mortgage a good option may be downsizing.
Think if you need a five-bedroom apartment while you are a family of three, I know this doesn\’t work for toronto and it is a much more complex issue but maybe you don\’t have to live in Toronto, maybe you can move outside of Toronto into a suburb, maybe work from home is an option for you right now and consider living at a further away place that may be cheaper and you can afford that.
Do you need a house with two parking spaces? If you don\’t plan on buying another car, this way you can buy a property with a mortgage of 3,00,000 and pay it off in a much lesser time, that being said.
I want to share this extra tip with all of you that I have learned from my experience. Having an emergency fund even if you\’re trying to pay off your mortgage as soon as possible is sensible to keep some money aside just in case you lose your job or there is an unplanned expense that comes up. This emergency fund will make sure that you don\’t have to borrow money from credit and will help you solve the problem.
More to know: Recently Sold Homes In Mississauga
Today you have learned how to pay off your mortgage early by being smart about it making your mortgage payments increasing your income and creating a monthly budget. These tips could easily cut your mortgage in half and help you pay off your mortgage in 12 to 13 years instead of 25 years