Let’s look at the various pre-payment privileges that are offered to the Mortgagor (you) that will enable you to reduce your debts quickly.
From lender to lender the following may differ, so therefore we will choose to discuss the average.
15% principal pre-payment privilege - lenders will offer you from 10% to 20% P.P.P. This means that you will have the opportunity to pay off up to 15% of the ORIGINAL mortgage amount off the outstanding principal balance once each year of the mortgage, with no penalty or charge.
15% Payment Increase
This privilege gives you the opportunity to increase your monthly mortgage payments by up to 15% each year. So for example if your original monthly mortgage payment is $1,000.00, after the first 12 months you can increase your monthly payment to $1,150.00 and the year after to $1,300.00 and on and on. This payment increase is pure principal reduction. As you can see this will greatly reduce the amount owing quickly..
Double-up Payments
Many lenders are offering a privilege referred to as Double-up Options. This means that a mortgagor can make an extra payment (equal to a regular monthly payment) as often as they wish on any payment date. This extra payment goes directly towards principal reduction.
As one can see by utilizing any or all of the above pre-pay privileges a mortgagor can reduce his/her outstanding mortgage balance quite significantly and therefore saving many thousands of dollars of interest costs and reducing the life of the mortgage.
Rates For
Fri, Jul 30, 2010
6:05 am
| 1 Year (Closed) | |
| CIR: 2.70 | Bank: 5.65 |
| 1 Year (Convertible) | |
| CIR: 2.70 | Bank: 5.65 |
| 1 Year (Open) | |
| CIR: 2.70 | Bank: 5.65 |
| 2 Years | |
| CIR: 3.45 | Bank: 3.65 |
| 3 Years | |
| CIR: 3.5 | Bank: 4.1 |
| 4 Years | |
| CIR: 3.89 | Bank: 5.24 |
| 5 Years | |
| CIR: 4.19 | Bank: 5.80 |
| 7 Years | |
| CIR: 5.15 | Bank: 6.0 |
| 10 Years | |
| CIR: 5.49 | Bank: 6.19 |
