Becoming Mortgage-Free

A mortgage will likely be the largest personal debt you will have in your lifetime. At Winnipeg Police Credit Union, we can help by providing you with tips and strategies to pay off your mortgage sooner and save thousands of dollars in interest costs!

You will be surprised at how much money you can save — and how much quicker you can pay off your mortgage — just by implementing one or more for the following money-saving strategies:

  • Make weekly rather than monthly payments.
  • Round your payments up from $190.80 to $200.
  • Increase the weekly payment by $5 each year.
  • Pay a lump sum of $500 (from income tax refunds) on the first anniversary, increasing subsequent annual payments $50 a year.

These strategies are simple and can save you thousands of dollars in interest costs. The most important step is to pick the strategies that are affordable to you and stick with them.

Use our Mortgage Calculators to test the effect of these mortgage reduction strategies on your own payments.

Pay More Frequently
Rather than making the usual monthly payments, divide your monthly payment in half and pay this amount bi-weekly to coincide with your pay dates. In effect, you would be making one extra monthly payment each year. On the mortgage $100,000 at 8% amortized over 25 years, the additional payment and the increased frequency of your payments would result in your mortgage being paid off five years sooner AND you would save over $30,000 in interest costs!.

Make Annual Lump–Sum Payments
The most convenient time to do this is usually on the anniversary date of your mortgage. Depending on the size of the payment, this can reduce the interest cost of your mortgage dramatically. Even a dollar a day, or $365 a year, helps. At Winnipeg Police Credit Union you can make additional annual payments of up to 20% of the original amount of your mortgage!

Keep Payments the Same When Interest Rates Have Fallen
If interest rates are lower when your mortgage comes up for renewal, consider maintaining your mortgage payments at the current level. After all, you have become comfortable with paying this amount and the amunt you would save because of the new lower interest rate would go directly to reducing the principal amount of your mortgage!

Raise Your Mortgage Payments in Line With Your Income
This strategy works well when your income is rising. Say you get a 5% increase in salary. Increasing your payment amount by the same percentage will reduce your mortgage balance more quickly and save you significant interest costs over the term of your mortgage!

Put Your Tax Refund To Work
Make a contribution to your RRSP each year and use the tax refund to pay down your mortgage. This is a very popular and effective strategy because it allows you to invest in your financial future through your RRSP contribution and increase your equity in your home more quickly!

These simple strategies, if applied consistently and persistently, will help you to pay off your mortgage much sooner and help you save thousands of dollars in interest costs, leaving you mortgage (and worry) free.