More and more people in Canada are now looking for ways to find an affordable home loan, which has become an increasingly difficult task because of the new rules. The interest rate has gone up, which has made it difficult to save on mortgage. Still, some experts think that you can make your mortgage rather affordable by shopping around. If you need money now, follow these tips. 

Along with considering your interest rate, you can save thousands by trying other options. For instance, you will end up paying less if your mortgage does not have serious mortgage penalties. Similarly, you can save money by taking advantage of different mortgage privileges that are available to people who consider making lump-sum mortgage payments. Here are some good reasons why you should seriously think of making lump-sum payments:

  • You have to understand that your regular monthly instalments are only going to tackle the interest and may do a little to lower the principal. The lump-sum contributions are going to cover the principal though. Therefore, it is a great idea to make larger contributions whenever possible to bring the principal down.
  • By making lump-sum payments, you will end up saving a lot of money on the internet along with saving years on your amortization period – the amount of time you require to completely clear your loan is the amortization period. By reducing this period, you will wind up paying less interest, which is going translate into big savings by the tie you pay off your loan completely.
  • Expect large savings when making larger payments. For instance, you may end up saving $17,774 in interest if you pay $2,000 per year on your $300,000 mortgage. You will also end up paying off your loan at least 6 years sooner – that is when you have a mortgage at the rate of 2.99% with a 25-year amortization.

In addition to making lump-sum payments, another great way to make your mortgage a lot more cost-effective is to accelerate your payments. Under normal circumstances, you would be making monthly payments to pay off your mortgage, but you should switch to accelerated bi-weekly payments to save thousands of dollars in the process. You may not notice a huge difference in the beginning, but these accelerated payments make a significant difference over time.

The fact of the matter is that most people think of paying their monthly instalments in a timely manner, which is a great thing to do, but it is not going to help them save any money. Making lump-sum payments is the way to save thousands of money. You do not have to do it every month though. Just do it whenever you can. In fact, you can do it with “found” money, which could be an inheritance, a one-time bonus, or even a tax return. Just make a conscious effort to make lump-sum contributions to pay off your loan quickly and more efficiently or work with a right mortgage broker to know how to tackle everything like a pro.