Over the last decade, higher inflation, the rising cost of living and an unstable job market have made carrying a mortgage more difficult for many Canadians. Homeowners often struggle with monthly mortgage payments and many dream of a day when they will become mortgage free. Paying off the mortgage is a dream for most people, but can actually be a realistic goal for some as well. There are many advantages to getting your home paid off early; financial stability, less monthly stress and the opportunity to enjoy financial freedom just to name a few.
Pay Less Interest – The cost of borrowing money from the bank to purchase your home is called interest and it's a large part of the mortgage payment. When you are able to pay down your mortgage earlier than the original term, you will pay much less interest. The money you save on interest will be much more useful elsewhere in your budget.
Take A Breath – Paying off your mortgage will create some flexibility in your monthly budget. Once you don't have to make the large payment on your home each month, you will be able to spread those funds out over your other household expenses. Getting ahead of your recurring monthly bills like hydro or gas, can help relieve the financial pressure during times that you are a little short on cash.
Protect Your Home – When times are tough and the economy is in flux, many people are unable to make mortgage payments and are forced into foreclosure. It's definitely an advantage to have your home paid off and maintain it as an asset rather than something that might cause financial stress.
Face The Future - One of the best benefits of paying down your mortgage early is freeing up those funds to be saved for your future. Imagine being able to bank all the money you spend on your mortgage and shore it up for your retirement or an unforeseen financial emergency.
Pursue Your Dreams – An excellent side benefit to paying off your mortgage is that you will have the freedom to do some of the things you have been dreaming of for years. Whether you want to take that dream vacation, switch careers, go back to school, buy a cottage or start a new business, becoming mortgage free will open a lot of doors for you.
Ultimately only you can decide if there's room in your monthly budget to pay more than your minimum mortgage payment. But if you can find a way to make it happen, you will find that you have a lot more financial freedom. Economic breathing room will afford you opportunities to improve your economic security and make the most out of the money you earn. Acquiring a mortgage is almost a necessity in the current real estate market but you don't have to be a slave to mortgage payments, so sit down and go over your budget and get creative!