There’s Good News and Not-So Good News About Your Mortgage During COVID-19
If you’ve opted for mortgage deferral assistance to free up some money, you’ll gain in the short term. The Canadian Bankers Association has reported that more than 90% of those seeking a deferral are approved.
The not-so good news is this relief effort comes at a cost. You’ll be paying compound interest. However, the good news is that your mortgage has prepayment privileges that will allow you to make extra payments later, without penalty, to help offset the deferral mortgage interest costs.
Most lenders will allow you to make lump sum payments (generally for as little as $100 on any payment throughout the year), and also increase your mortgage payments (once per year). Some lenders allow you to double up payments as well.
Two Smart Mortgage Strategies:
- Use next year’s tax refund to make a lump sum payment against your mortgage.
- Pay your mortgage every two weeks (biweekly accelerated) and shave years of interest accrued from the mortgage deferral. You won’t even notice the extra month’s payment per year.
Helpful links to learn more:
https://cba.ca/bank-sector-relief-measures-during-the-covid-19-pandemic?l=en-us
Do you know your mortgage details?
Contact me if you have any questions about your mortgage. I’m here to help you weather the storm.
