La catégorie Financing

iStock

How Long Should it Take to pay off a Mortgage?

“The faster you pay off a mortgage, the more you save in interest,” says Louis-François Éthier, product manager at National Bank.

The truth is, paying off a $100,000 mortgage in a short period of time is extremely difficult without both a sizable and stable income, and relatively few expenses. A small regular payment stretched out over a longer amortization period (the total time required to pay off the mortgage) is usually considered an expensive strategy. This is because mortgage payments mostly cover interest and little of the principal until the interest is paid, so it can take decades to pay off the balance.

“The amount of your mortgage payments should be based on your overall budget,” says Louis-François Éthier.

How much of your budget should go toward mortgage payments?

Most financial institutions recommend that no more than 30% of your total budget go towards mortgage payments, municipal taxes, and heating. “It’s the classic ratio in the industry: mortgage to total debt,” says Mr. Éthier. “It’s crucial to also consider other debts, such as car loans and balances on credit cards. Mortgage counsellors can help you make the right choice.”

Of course, the expected time if would take to pay off the mortgage directly influences the amount that we spend on our regular payments. Continuer la lecture

Canada’s new mortgage rules – What you need to know

On January 1, 2018, the revised Guideline B-20 came into effect, governed by the Office of the Superintendent of Financial Institutions (OSFI). The changes to Guideline B-20 reinforce OSFI’s expectation that federally regulated mortgage lenders (FRML) remain vigilant in their mortgage underwriting practices. The full outline of the revised Guideline can be found on their website.

iStock
iStock

How do these new changes affect you?

Continuer la lecture

Thinkstockphoto

Buying your first home before 30

We used your questions and comments as inspiration to talk about 2 things that especially concern young adults when it comes to housing.      

  1. I’d like to buy a home within 5 years, should I make sure to pay off my student loan first?

No. In fact, accelerated repayment is rarely advantageous because student loans are generally amortized over 10 years, the rate is low, and interest is tax deductible.

The debt you should prioritize is consumer debt (credit cards, lines of credit, personal loans, etc.). You can reconcile your big plans with debt repayment: Follow the guide.

Continuer la lecture

Finance_Desjardins_Thinkstock_823939634

3 tips for creating more space—no renovations required

At some point, we all find ourselves with a shortage of storage space, even when our homes aren’t crammed with furniture and decor. Before taking on huge renovations, why not first recreate your living space?

  1. Create illusion

There’s nothing like a strategically placed mirror to make a room look bigger. Don’t go too heavy on the decor; remove something you already have and replace it with the mirror. If you don’t have a mirror, visit flea markets or garage sales to snag a bargain.

Choosing a light colour for the walls and ceiling will help make the room feel larger while increasing light. Opening up the windows and letting light in also helps. Continuer la lecture