Get clients to pay off mortgages faster

Nearly two-thirds of mortgage holders agree it’s possible to pay off their mortgages faster without impacting their lifestyles, finds a Scotiabank study. In fact, 59% believe adding $20 per month to their payments would have no impact on finances.

Read: Homeowners to spend 15K on renovations

“While periodic lump sums and even switching to bi-weekly payments are great options, increasing your payments by small amounts can have an incredible impact,” says David Stafford, managing director of real estate secured lending at Scotiabank. “Every dollar you don’t pay interest on for a 20- or 30-year mortgage can add up to real savings.”

The top steps Canadians have taken to say reduce their mortgages are increasing the frequency of regular payments (45%), renegotiating for a lower mortgage rate (29%), increasing amount of regular payments (26%) and making additional payments (26%).

Read: Beware when clients co-sign mortgages

Additional findings include:

• 79% have taken at least one step to pay off their mortgage faster;
• When asked if they own or rent their primary residence, 35% own with a mortgage, 29% own without a mortgage, 32% rent;
• 49% cite not having the funds to pay off their mortgages, 27% have other payment priorities, 8% aren’t sure what steps to take.

Stafford suggests setting up pre-authorized payments and taking advantage of cash back credit products.

Also read:

Investment tips for today’s homeowners

How to borrow smartly

Should clients rent or buy?

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.