We all want to pay off our mortgage early. Like today if possible. Well I will tell you from extensive experience that the bank’s mortgage payment calculator is not going to get you there earlier like they are advertising. Why you may ask? Because they have a good reason to keep you inside the mortgage box (they created it after all).
Who’s Rules Are You Playing By
Have you ever played a board game with a child who is unable to reason yet? You will notice that you are unable to win because their rules change to suit their needs. So to when we as Canadians attempt to pay off our mortgage quickly with the bank. Even those who are familiar with an understanding of a mortgage payment calculator and how to implement the various bank options like accelerated payment plans and reduced amortization schedules. Did you know that you are still playing by a set of rules that are stacked against you?
Two Steps Forward – Ten Back
Where the plan the bank has sold you fails for a surprising amount of Canadians is in the Mortgage Planning department. You have bought into their marketing hook, line, and sinker and then life happens and you fall behind on your mortgage payments. A reduced amortization with an aggressive payment plan has left you exposed when cashflow becomes tight and there are very few ways to remedy this. If you have chosen a collateral charge mortgage (which you may not even know you did because the bank didn’t feel the need to disclose this) the bank can raise your interest rate up to 10%. How was that plan for paying off the mortgage early going so far?
Avoiding Payment Pitfalls
The next thing we need to be very wary of are the various sweet looking, well camouflaged traps that have been set along the path of working with the bank throughout the term of your mortgage. There are four very obvious traps that will keep you inside the mortgage box many years longer than necessary. You won’t see these marketed on the side of your local branch!
Jumping Out Of Bed With The Bank
The solution here is to begin working on a plan outside of the bank’s mortgage box. There are many ways of paying off your mortgage early that give you the freedom to set your own course and retire way ahead of the pack. The key to beating the bank’s mortgage payment calculator is to begin thinking outside of it. There is a unique opportunity to borrow money at truly historical low rates at a fixed cost of borrowing and pay it back with dollars that are worth less later. In an environment of monetary stimulus – prudent leverage and seeking returns that will beat inflation are the keys to winning.
As was said of the Matrix – the wool has been pulled over your eyes to keep you blinded from the truth. Do not think for one moment that you are smarter than a complex financial system that has been honed over many generations to squeeze every dollar out of your economic livelihood. The bank’s mortgage payment calculator is there to keep you in interest payment bondage. If you know who’s rules you are playing by and become aware of the various ploys along the way that are there to derail you – your chances of coming out ahead go way up. Remember – I only represent my clients in all I do and your questions are always encouraged and answered promptly.