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Ways to lower my mortgage payment?
May 12, 2019
3:11 pm
leo123
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May 12, 2019
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Hey guys, anyone have any advice on how to lower my monthly mortgage payment through the bank? (ie. extend the repayment term, etc)
Thanks

May 12, 2019
3:31 pm
Kidd
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This is my opinion

Mortgage vs rrsp.  Pay the mortgage, reduce debt.  You can carry contribution room forward.
Mortgage vs tfsa. I would pay down the mortgage again.

Increase payment frequency, if it's monthly.... may a payment every 2 weeks.

The fees to move a mortgage to another institution can be very costly.  So do the math before doing so.

I had the opportunity to work a lot of overtime at GM.  That extra money went toward the mortgage. Once the mortgage was paid off, a weight was lifted.  So a few tight years with everything going toward the mortgage, paid off BIG TIME in the long run. 

May 12, 2019
3:56 pm
AltaRed
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The OP hasn't provided any description of what he means. I think he is looking to reduce by extending amortization for a reduced monthly payment, which is opposite of what one should be doing such as extra payments, annual pre-pays, etc.

May 13, 2019
12:09 am
Loonie
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I basically agree with the others. Most people should not be trying to reduce their payments per se, although you may benefit from making them more frequently. Don't assume low interest rates will last indefinitely. Take advantage of them to pay down more of your principal.

However, if he is looking to lower his payments because he is having trouble meeting them, then that is a different problem requiring different solutions.

May 13, 2019
7:06 pm
dougjp
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The only answers I can think of to what appears to be the question are;

(1) shop for a better rate 3-4 months prior to mortgage expiry (when banks will lock in the rate that applies when expiry comes). Make sure to calculate the interest rate difference over the term vs. costs to change, if any. The costs to change are nominal from most banks if the principal owing stays the same. In other words, it has to be financially beneficial before the end of the next term. Lower rate means lower payments.
(2) if, as is often the case, a mortgage is transferable if you sell the property, then my view is the last thing you want to do is pay down a mortgage early. Unless of course you have no control if some cash becomes available. I don't look at a mortgage as a ball and chain and getting it paid lifts any weight off (but to each his own). Cash is king, as most of us here in this forum know. So a mortgage is an opportunity as long as rates are reasonable. If you don't have liquidity, sooner or later you have a problem. A mortgage allows diversification, ability to act and take advantage of a special.
(3) Extending the amortization period lowers the payment.

May 14, 2019
9:36 am
Rick
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Hard to say without knowing all the details of your situation. Depending on your term, the amount of time left on the current mortgage, which FI you are using and the interest rate you are currently at, they may be open to refinancing with a blended rate. ie...take the rate you are currently at and the current posted rate, and refinance at a rate better than what you are at now but more than the posted rate. Did that with my first mortgage way back when interest rates were way higher.
Extending amortization works, but do the math...it will cost you way more than you are saving monthly.
Changing to bi-weekly payments has minimal effect on payments, but will save you in the long run.
Only other option I can see is change providers and suck up the penalty for early pay off. Not a big fan of taking on more debt to reduce payments, but could be worth it if you REALLY need a few extra bux per month.
Otherwise, I concur with others...should be making extra payments to clear it ASAP. That will save you the most money overall.

May 16, 2019
4:16 pm
mechone
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blend and extend .. I did it after I bought out the wife's half of the house ,extended the amortization and blended the interest ,no charge. I then worked tons of o/t doubled the weekly payments allot of times during the year and had it paid off at 40.
However I still contributed to rrsp and savings, when it was paid off I kept making the payments to a savings account to which I still do to this day (now 57)and have saved well over a million plus the house .
I took some advice from some old guy's ,keep making the payment's or you will end up with a garage full of Canadian Tire

May 16, 2019
6:59 pm
AltaRed
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Guys, the OP has gone AWOL. You may be wasting your time.

May 17, 2019
3:23 pm
Bill
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Probably scared him off - look at his original question and then the preponderance of the advice from the savers here is re why it's so great to pay off a mortgage asap.

May 20, 2019
10:09 am
Vatox
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I realize OP is gone, but it appears to me that the best answer would be to downsize to a smaller dwelling. Problem solved.

May 20, 2019
1:19 pm
Kidd
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I'm not sure if down sizing is the answer but I have no expertise is this field. 

Factors that i would consider... current equity in the house, current value of the house. Will you qualify for another mortgage?  A smaller dwelling (Sorry, the too tense joke didn't go over better) or having to move further away may make your life miserable, and further away means more transportation costs.  

If you could sell your current house and turn a nice profit, taking into account all the fees and all the interest you've already paid on the current mortgage. Yeah maybe, look into it.

My first mortgage had an interest rate of over 11%.  When i saw the interest paid compared to the debt paid, i seriously considered becoming a bank robber because the bank (Canada Trust) was robbing me blind.  At that point in time, every dollar i had went toward the mortgage.  Yearly, i could make a lump sum principal payment, which i did, i also went bi-weekly over monthly.

Leo an option might be, could you possibly rent out a room, or the basement?  If you extend the mortgage, you'll end up paying for the house 3 or 4 times.

Mortgage payments are rough on everyone, so you are not alone.  Believe me, those first few years meant no trips, no toys and very little joy BUT as i said in post #2, once that debt is paid.  You are on easy street.  I was able to retire with my youth, my hair not so much.

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