Unless you purchase your home with cash, you’ll need to budget for mortgage payments. Tips on making them less painful

Wendy Perry, a mortgage professional at Saskatoon-based Dominion Lending Centres North Star Mortgages, recommends the following four mortgage-interest manoeuvres.


Before buying a home, take the time to search for the best interest rate. It’s possible to do this yourself — by talking to banks about the rates competitors are offering — or it may be easier to go through a mortgage professional who has access to lenders across the country. The more financial institutions compete for your business, the better rate you’re likely to get. For example, Perry, who has access to more than 90 lenders, has been able to find her clients rates between 0.5 and one per cent below posted bank rates.


The higher your credit score, the better your mortgage interest rate may be, suggests Perry. A stellar score can often cut a rate by as much as one per cent and will also allow you to access more lenders. “Many lenders aren’t interested in people with very low scores because it’s too much risk,” Perry warns. Improve your score by regularly paying your bills on time and using less than 50 per cent of your total available credit. Visit genworth.ca to learn the myths and truths about what affects your credit rating.


“We’ve been trained to make mortgage payments once a month,” says Perry, “but there are other options.” You can reduce total interest significantly if you pay bi-weekly or weekly. The actual payment will be about the same, but you’ll allow less time for interest to accumulate. For example, if you have a $300,000 mortgage at a three per cent fixed rate with a monthly payment schedule, you’ll pay more than $125,000 in interest over 25 years. If you choose an accelerated bi-weekly plan, where you pay every two weeks, you’ll pay less than $110,000 in interest and you’ll eliminate your mortgage in a bit more than 22 years.


This option may be tricky for many homeowners, but most lenders allow you to pay a yearly lump sum of up to 20 per cent of the original loan. That might seem a hefty number, but any extra amount you can put towards your mortgage will help because the entire payment goes directly to the principal. Take that same $300,000 mortgage you pay off on a monthly basis. If you put an extra $5,000 toward it every year, you’ll save more than $42,000 in interest costs and pay off your mortgage seven years earlier. Increase that to $10,000 a year and your 25-year mortgage will be paid off in just 13 years.

  • Banks, credit unions and mortgage companies lend money to home buyers. This loan is called a mortgage. Your lender will ask you to fill out a loan application form that includes information about your income, employment and debts, and will use this information to determine your eligibility for a mortgage.…
  • Understanding your mortgage may seem intimidating at first, but it's not as difficult as it sounds By Madhavi Acharya-Tom Yew, Toronto Star Learning more about how mortgages work could save you thousands of dollars in interest or penalties. There are three basic parts to a mortgage: the amortization, the term and the interest…
  • Gauging your financial fitness is crucial for first-time homebuyers. The better shape you’re in financially, the more likely you are to succeed at homeownership. That’s because a strong credit history, lean debt-service ratios and a robust down payment work together to promote affordability. For the best mortgage terms and rates,…
  • Before you take your first step towards buying a home, it is important to determine what you can afford and then decide which mortgage type works best for you. Here are some basic mortgage terms that you need to know...
  • In late 2016, Canada’s new mortgage rules – aimed at promoting responsible homeownership – were introduced by the federal government. Although the changes included measures geared toward curbing foreign real estate speculation and others specific to low loan-to-value mortgages, let’s focus on the change most likely to affect affordability for…
  • It’s often the largest purchase canadians will make, but many enter into the great adventure of homeownership without completing the proper financial homework.

Achieve the homeownership dream sooner