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Is It Time For a Mortgage Checkup?

Jackson Middleton • Dec 04, 2018

It’s coming up on the end of the year. It’s most likely been another busy year for you; when is it not right? While there’s so much to do as we get into the holiday spirit, this is a great time to reflect on your finances, more specifically your mortgage. Maybe you’ve had your mortgage for a couple years and it’s not top of mind. But things have not only changed in the mortgage industry, but also likely your own finances.

If you’re paying more than four per cent on any debts, now’s the time to look and possibly refinance the debt into your mortgage.

Mortgage Brokers work on so many files where people don’t realize their consumer debt is handcuffing and limiting them on what they’re able to do.

Their clients are concerned they’ll pay a penalty to refinance or lose their rate, but they don’t look at the long-term picture and realize how much they can save.

Yes, it’s gotten harder to refinance with all the government regulations and stress tests, but it can be done and it might save you money. Just remember, if you do decide get rid of the consumer debt, you need to make sure you don’t go down that hole again.


Once you’ve consolidated, look at your trade lines and keep what you need, not what you want and change spending behaviors where you can.

If you’re feeling good about your financial situation and have a little extra cash each month, consider your payment privileges.

If you do have pre-payment privileges, accelerated payments are fantastic if you use them.

A full-frill mortgage product could have a number of pre-payment privileges including accelerated payments of up to 20 per cent of your monthly payment, double monthly payments, and annual payments of up to 20 per cent of the full loan amount.

You might be surprised how much time you can knock off your mortgage by accelerated payments.

For example, on a 30-year mortgage, a one-time 10 per cent increase on your monthly payment can shave four years off your mortgage. If you bumped up your payment by 10 per cent each year, you would be mortgage free in 13 years. If 10 per cent is too high, five per cent gets you mortgage free in 18 years.

These are just a couple ways a mortgage checkup can help save you some money and get you on the right path for 2019.

If you'd like to discuss your options - any of our Canadian Mortgage Experts would love to help!


This article was included in the December 2019 DLC Newsletter.


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RRSP As A Downpayment

By DLC Canadian Mortgage Experts • 28 Dec, 2022
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Is There A Difference Between A Deposit And Downpayment

By DLC Canadian Mortgage Experts • 21 Dec, 2022
If you’re new to the home buying process, it’s easy to get confused by some of the terms used. The purpose of this article is to clear up any confusion between the deposit and downpayment. What is a deposit? The deposit is the money included with a purchase contract as a sign of good faith when you offer to purchase a property. It’s the “consideration” that helps make up the contract and binds you to the agreement. Typically, you include a certified cheque or a bank draft that your real estate brokerage holds while negotiations are finalized when you offer to purchase a property. If your offer is accepted, your deposit is held in your Realtor’s trust account. If your offer is accepted and you commit to buying the property, your deposit is transferred to the lawyer’s trust account and included in your downpayment. If you aren’t able to reach an agreement, the deposit is refunded to you. However, if you commit to buying the property and don’t complete the transaction, your deposit could be forfeit to the seller. Your deposit goes ahead of the downpayment but makes up part of the downpayment. The amount you put forward as a deposit when negotiating the terms of a purchase contract is arbitrary, meaning there is no predefined or standard amount. Instead, it’s best to discuss this with your real estate professional as your deposit can be a negotiating factor in and of itself. A larger deposit may give you a better chance of having your offer accepted in a competitive situation. It also puts you on the hook for more if something changes down the line and you cannot complete the purchase. What is a downpayment? Your downpayment refers to the initial payment you make when buying a property through mortgage financing. In Canada, the minimum downpayment amount is 5%, as lenders can only lend up to 95% of the property’s value. Securing mortgage financing with anything less than 20% down is only made possible through mortgage default insurance. You can source your downpayment from your resources, the sale of a property, an RRSP, a gift from a family member, or borrowed funds. Example scenario Let’s say that you are looking to purchase a property worth $400k. You’re planning on making a downpayment of 10% or $40k. When you make the initial offer to buy the property, you put forward $10k as a deposit your real estate brokerage holds in their trust account. If everything checks out with the home inspection and you’re satisfied with financing, you can remove all conditions. Your $10k deposit is transferred to the lawyer’s trust account, where will add the remaining $30k for the downpayment. With your $40k downpayment made, once you sign the mortgage documents and cover the legal and closing costs, the lender will forward the remaining 90% in the form of a mortgage registered to your title, and you have officially purchased the property! If you have any questions about the difference between the deposit and the downpayment or any other mortgage terms, please connect anytime. It would be a pleasure to work with you.
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