Relocation services for British Columbia, Canada

Mortgage Tip

This tip comes from our guest contributor, Keith Baker, who is a mortgage advisor in Vancouver. Keith was recommended to us by friends and we have found his service to be excellent. We can whole-heartedly recommend him.

When making mortgage payments, it is always more beneficial to make bi-weekly payments i.e. every 2nd week rather than monthly payments. The benefit arises from the fact that you are decreasing the principal balance and reducing the interest debt faster by paying bi-weekly.

On a 25 year amortization (the typical amortization period chosen in Canada) and over a 5 year mortgage term (also a typical mortgage term), you will have 16 years and 7 months amortization remaining whilst making bi-weekly mortgage payments versus 20 years amortization remaining whilst making monthly payments. So, this simple change in how you pay your mortgage will typically reduce your mortgage term by over 3 years.

Keith Baker is an owner/broker of The Mortgage Centre. You can contact Keith Baker via the form below: