Cash Flow Vs Mortgage Payments
All of us at one time or another has faced the problem of deciding how much should be pay down or mortgage versus maintaining a steady family monthly cash flow.
You will hear advice along the lines of paying your mortgage faster by increasing your monthly payment, pay lump sums when possible, altering your mortgage to make interest and/or payments tax deductable expenses. These are all good ideas.
On the other hand you will also hear a lot of advice about ways to increase your monthly income, strategies to make your investments earn more, tax strategies to reduce the contribution to the national purse. These are also very good ideas.
The best idea though is to get expert help when you negotiate the mortgage in the first place. That way you can be assure that you are getting a mortgage with terms that offer maximum flexibility according to your family situation, monthly income and financial goals.
It is not uncommon for Canadians to refinance their mortgages years before the end of the actual mortgage term. However, according to the Bank of Canada this average rate includes average highs such as an 18.15% in 1981 and average lows such as 5.48% in 2005. Therefore, even if you have to pay an interest penalty to get out of your current mortgage agreement, you may still save a substantial amount of interest over the life of your mortgage by refinancing before your mortgage term expires.
Consulting with an expert mortgage broker is always the best advice we can offer. Only an independent third party mortgage expert can negotiate the best mortgage for you.