The Skinny on Monthly vs. Bi-weekly Payments

With all the headlines in the media these days about housing bubbles, we need to take a look to find the silver lining.  We truly believe there is a silver lining for those people who really understand how to manage their mortgage.

If you want to pay off your mortgage in a specific time frame or buy that larger home for your expanding family, you need to have a plan and understand the options you have available to you.  In the past many people have relied on house prices increasing to build equity which will allow them to make that next purchase or to upgrade their current home.  Since so many people took those 30 or 40 year amortized mortgages, building equity can be a challenge when house prices are not climbing.

There are a few simple things you can do that will help you build equity so that you can buy that bigger house, condo at the ski hill, or even better, payoff your existing mortgage sooner.

Purchase Price	$400,000
Down Payment	$20,000
	$380,000
CMHC Premium	$10,450
Mortgage	$390,450
	Monthly	Bi-weekly Accelerated	Round up payment
Payment 3.19%	$1886	$943	$1,000
25 yr Amortization
Balance after 5 Yrs	$334,945	$324,646	$316,627
Equity	$55,505	$65,804	$73,823

As you can see in the example above, by making some small changes to when and how much you pay, you can create a lot of equity in even 5 years, regardless of what is happening to house prices.  These numbers grow even faster if you bump up the payments annually or put that tax return down as a lump sum.

The key is to first decide what truly drives or motivates you, and then work with us to build the plan that will help you achieve your goals. An accountability partner can be a huge asset when trying to stay on track and no one knows more about mortgages than we do, so let us know if we can be your accountability partner and let's start developing your plan today