Financial experts advise that making lump-sum mortgage payments can significantly reduce interest paid and shorten the path to being debt-free, especially with higher interest rates. They suggest using bonuses or tax refunds for these payments, but emphasize considering them as part of an overall financial plan, prioritizing higher-interest debts like credit cards first.
The best time to make a lump-sum mortgage payment, according to the experts
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TL;DR: Key points with love ❤️Financial experts advise that making lump-sum mortgage payments can significantly reduce interest paid and shorten the path to being debt-free, especially with higher interest rates. They suggest using bonuses or tax refunds for these payments, but emphasize considering them as part of an overall financial plan, prioritizing higher-interest debts like credit cards first.
- Saves on interest
- Shortens mortgage repayment period
- Increases cash in hand if selling home
- Helps manage higher interest rates upon renewal
- Must be considered within overall financial plan
What: Financial experts provide advice on the benefits and considerations of making lump-sum mortgage payments.
When: Not specific, general financial advice.
Where: Canada (implied by mentioned organizations and cities). North Vancouver, Ottawa.
Why: To save on interest, become mortgage-free sooner, and manage potential payment increases upon renewal.
How: By reducing the outstanding mortgage balance with additional payments, thereby reducing the amount on which interest is calculated.