Well this is good news. Apparently Canadians aren’t as financially irresponsible as we’d been led to believe – we’re actually using low interest rates to pay down debt faster, rather than using them to go on wild shopping sprees.
According to a recent report by CIBC, many Canadians are paying down their mortgages faster by putting a little extra down – he estimates the average Canadian mortgage amortization is closer to 20 years now, as opposed to 25. If you haven’t yet joined the party, there are many easy ways to shorten your amortization, including:
– Opting for accelerated biweekly payments. This method is particularly pain free if you’re paid on a biweekly basis. You’ll barely notice you’re getting an extra payment in every year!
– Making a lump sum payment. Most mortgages come with prepayment privileges. It might be worth a look to see what yours are, especially if you have a bonus or commission coming your way.
– Rolling up your payments. This doesn’t have to be a lot of money – even a few dollars can shave thousands of dollars off the life of your mortgage, and allow you to pay it off months faster.
How have you taken advantage of today’s low interest rates?