Supersize your Mortgage payments

According to a recent RBC Home Ownership survey, 65 per cent of Canadian homeowners are worried about mortgage rate increases, and 56 per cent admit that their mortgage is higher than they expected. “Flexible payment options can help take some of the guesswork out of interest rates increases,” says Marcia Moff at, RBC head of home equity financing. “Speaking with a mortgage specialist and making a few simple changes can help you save thousands on interest costs as well as take years off your mortgage.”

Here are a couple of tips to help you pay off your mortgage even faster.
» Make annual mortgage payments on the principle. Many mortgages allow you to make a lump sum payment once every 12 months or at renewal time, which is applied directly to the principal. If you come into a large sum of money through an inheritance or bonus, consider making a prepayment, which can shave years off your mortgage.

» If you double up your payments once per year for 25 years, on a $250,000, 25-year mortgage at five per cent interest, you can save more than $30,000 and shave 3.5 years off your amortization term.

» Switch to a bi-weekly mortgage payment schedule. Changing to an accelerated bi-weekly payment can be an easy adjustment that will help you save on mortgage interest.  e bi-weekly accelerated payment works to help you pay down your mortgage faster as you actually end up making 26 bi-weekly payments a year versus 12 monthly payments.  is adds up to one extra monthly payment every year.

Unlock the power of mortgage pre-approval
So, you’ve decided to take the plunge into home ownership and start searching for your first home? Make sure you have your financing in order before you start your search.

“Having a mortgage pre-approval is a critical component of buying a home, particularly for younger homebuyers,” says Marcia Moff at, RBC head of home equity financing. “It presents you as a serious purchaser to both realtors and sellers.”

Pre-approvals have no obligation and help lock in your interest rate. It also clarifies your budget and sets your expectations accordingly so you’re not wasting your time viewing houses that are beyond your budget.

With a pre-approved mortgage you will know what you can afford right away. On top of the pre-approval amount, consider your lifestyle preferences and how future cost increases may impact your payment comfort zone.

For more information, visit rbcroyalbank.com

Source: New Home Guide