Having the option to defer mortgage payments has been a great source of relief for many Canadians. The large banks introduced options to defer up to 6-months of mortgage payments. But what is the cost of mortgage deferral and how does your mortgage change in the future?
The option to defer mortgage payments has been incredibly helpful for those with reduced income or cash flow. It’s provided an enormous amount of relief. It’s even allowed some people to build up a small amount of emergency savings (a personal finance best practice).
But what is the cost of these reduced payments? How will interest be accrued? What options do you have to reduce this accrued interest in the future?
In this post we’re going to use our free debt calculator to estimate the cost of mortgage deferral. We’re going to explore how the deferral impacts both short-term and long-term finances. Plus we’ll look at how different repayment options may impact the total amount of interest paid and the length of time to mortgage freedom.
One of the largest purchases we’ll ever make in our lifetime is when we buy a home. It’s an exciting time but also very stressful financially. Along with this massive purchase comes an equally massive mortgage. This debt typically takes between 25 and 30 years to pay off but many people choose to pay off their mortgage early.
Paying off the mortgage early is an important financial goal. It’s a goal that is typically (and hopefully) achievable before reaching retirement age.
Paying off the mortgage early is a great medium-term goal, something achievable within 10-20 years (or even earlier if you’re really aggressive). Because it’s a medium-term goal this makes it very interesting as a financial goal. It can be very motivating to see progress against your mortgage each year.
Getting rid of the mortgage is a great feeling! It’s incredibly freeing to see those mortgage payments disappear. It’s also nice to know that you have the security of owning your home outright.
Paying off the mortgage early also removes a huge burden from a family’s monthly cash flow. This creates a lot of flexibility to make lifestyle changes, switch careers, take more time off from work, or even retire early.
There are different ways to pay off a mortgage early. Which method you choose will depend on your personal and financial goals. The important thing is to make a plan.
Making a mortgage payoff plan can be exciting. It’s amazing to see how those future payments can quickly reduce your mortgage. Making a plan is easy and we’ll show you a couple of examples using our free debt payoff tool.
It’s the new year! Time to kick start your finances!
This ten day routine will help you shift your finances into high gear. This routine is aggressive, ambitious, and a bit challenging. This routine will cover all the basics of a good financial routine. Having a routine for your money is one of the best ways to improve your finances this year.
If ten days seems like too much (and it probably is!) then consider spreading these steps over ten weeks or even ten months to make things a bit easier. The key is to find a pace that works for you. It’s better to take a bit more time if it means you’ll stick to your new routine.
If it seems daunting then consider pairing up with a friend, co-worker, or getting the help of a financial coach. At PlanEasy we offer custom financial coaching & advice for our clients. As a new client, we’ll create a 12-month program tailored specifically to you and your goals. If you struggle with your financial routine then a bit of coaching & advice might be exactly what you need to improve your finances this year.
I love a good debt payoff story. There is something satisfying about seeing someone pay off a mountain of debt in a short period of time. This story comes from a reader who has a total of $46,174 in student and credit card debt. They used our debt payoff calculator to create a debt payoff plan that kills this mountain of debt in just over 2.5 years! Amazing!
When it comes to paying off debit it can sometimes feel like an endless struggle. It seems like interest is constantly work against you (which it is!). Payments are being made every month but the balance never goes down as fast as you hope.
This blog post isn’t quite a debt payoff story, not yet anyway. This post is about a debt payoff plan. Every debt payoff story starts with a good debt payoff plan. This plan aims to pay off almost $50,000 of debt in just over 2.5 years.
Let’s see how they’ll do it!
When it comes to debt payoff there are two popular strategies. These strategies are known as the “debt snowball” and the “debt avalanche”. These two popular strategies to pay off debt take advantage of human psychology or mathematics to help you pay off your debt faster.
Which debt payoff strategy you choose depends on your situation. Choosing one method vs the other may mean you pay your debt off faster OR it could mean you take longer to pay off your debt and end up making more interest payments.
The problem is that everyone in different and there isn’t a one-size-fits-all strategy. We have different amounts of debt. Our debt is spread over different accounts. And those accounts carry different interest rates (And to make it even more complicated, some kinds of debt let you reduce payments in difficult times, like some student loans, which can be a very valuable benefit!).
On top of this we all value things differently. Some of us prefer that immediate feedback (even if it means paying a bit more in the long run). Whereas some of us prefer to delay gratification a little bit, as long as it’s worthwhile in the end.
Choosing the right debt pay down strategy will depend on your personal situation and who you are as a person. In this post, we’ll summarize the two different methods and propose a third method that combines the best of both worlds.
We’ll also show you a cool little debt calculator that will help you decide which debt to pay off first.
Debt is the nasty little gift that keeps on giving. Constantly growing and taunting you with interest and minimum payments.
Left unchecked debt can spiral out of control. The good news is that there are lots of different strategies to help you tackle your debt. Many people have been in the same situation and they’re now living debt free. It just takes some planning and dedication to get out of debt.
Debt elimination is possible. Put debt in its place by doing these three things…