What an Average Age to Pay Off Mortgage Canada Is?

If you are starting to think of getting yourself a mortgage, you may also think about the average age to pay off mortgage canada. It is really worth knowing before making any deals because good planning of your expenses can save you thousands of dollars and millions of your nerve cells. 

An Average Age to Pay Off Mortgage Canada

Paying off a mortgage may be a good idea, but it depends on dozens of factors. First of all, the answer to the question in the title of our article is 40 years. It is based on the overall statistics. A lot of people tend to sign mortgage contracts in their twenties and they choose a longer amortization period so they can afford regular mortgage payments. So the average age consequently is 40-45 years. 

What do you need to do to raise the average age to pay off mortgage canada? Well. it is inevitable, but if you shorten the time of your mortgage you increase your monthly payment at the same time. So, it’s either buying a less comfortable house or being a millionaire. 

 The time of mortgage payoff depends on several factors: 

  • Your current financial status
  • How convinced are you to pay off the mortgage quickly
  • Bank`s policy about paying off the mortgage early

Some banks do not permit early mortgage repayment if your credit rating is not good enough; this means that they will be more conservative about your application. However, some banks would allow people with a lower rating to pay off the mortgage sooner. There is no sense in paying off a mortgage quickly if there is no need for it. To avoid this situation, you should do some research on the potential bank before you make any commitment to them.

Tips for Closing Mortgage Quickly

How can you speed up the process of paying off your mortgage? Well, there are many ways, ranging from attaching an additional source of income to your mortgage to acquiring a second job. On the other hand, it may be possible to shorten the time of mortgage payoff by changing or refinancing your contract. Let’s look at different ways in greater detail.

1. Buy a Comfortable but Small Home

Buying a smaller and more affordable home is a great way to shave years off your mortgage. It is because the most important reason for taking a mortgage in the first place is to buy an actual home and live in it. The price of the house will obviously depend on the places you live in; we will take an average value of $282,282 (September 2012 statistics), which is the average price of houses bought by Canadian citizens. But it can decrease if you:

  • Choose to live further from the center
  • Choose a smaller house to live in
  • Choose a flat, instead of a house or condo

Yes, we understand, that when you were small you dreamt of having a nice big house of your own. However, it may be really difficult to get it. You can buy a smaller one for the first time and quickly close your mortgage, so the next time you will be able to buy a house of your dreams from saved interest.

2. Make Your Monthly Payments Bigger

Since the money is a necessary part of your mortgage, you can actually grow a bigger payment. It means a little more for you, but it will also bring more money to your bank account. The amount of the extra money depends on your plan. Here are several ways:

  • Find a second job and reduce your everyday expenses
  • Take money from retirement savings or other investments

Increased regular mortgage payments require some sacrifices, but it is really worth it in terms of shortening the mortgage amortization period and saving money on interest percentages. 

3. Find a Mortgage with a Lowest Rate

There are mortgage loans with low-interest rates available. It is not necessary to have a good credit history to get one. You can take advantage of the lowest interest rates available today even if you have no money to put down as a deposit, so you do not need any cash for the down payment. Finding the lowest rate of interest is just a matter of your time. You can use different mortgage comparison websites or simply go to banks and financial institutions that offer their services in your area.

How fast can you pay off your mortgage? It depends on your current budgeting skills and the amount of money that you have put aside for it. If you have a small amount of money to put aside, paying off your mortgage will take a long time. But if you have enough money, you will be able to pay it off during a shorter period of time.

Other ways of improving your financial health and helping you with a mortgage are:

  • Improve your credit score (Since it is the most important index each bank will look at it is great to have a credit score at least at 650 level)
  • Hire a mortgage broker to compare mortgage rates from multiple lenders
  • Pay off your existing debt and do not make new ones
  • Keep your income stable and gradually increase it if possible

Everything is really hard if we are talking about money. But we hope that you will be able to find a perfect balance between your personal comfort zone and saving money to pay off your mortgage quickly

4. Minimize Your Everyday Expenses

Can you shorten the time of mortgage payoff? Generally speaking, yes, but it depends on many factors. The fewer expenses there are, the more time you save. You can achieve this by:

  • Canceling your unnecessary subscriptions
  • Cutting down flights and restaurants: flying may be expensive but it is worth taking a few days trip to see friends and relatives during Christmas and New Year
  • Doing some house repairs: you will be able to finish your work faster and save money
  • Replacing old household items with new ones that require less electricity or water
  • Surveilling your budget

The last point is the most important one. You can not really plan your income and expenses without making a budget. The only thing you have to do is to find a balance between your needs and your income.

  • Calculate what are your needs
  • Calculate your monthly income

As for these needs, it is not always easy to calculate all of them. However, it is possible to guess most of them: rent/mortgage, utility bills (water, electricity), grocery payments, etc. You can make a payment plan with your bank. In this case, the bank will also allow you to pay it off earlier as long as the total duration of all payments is not over 10 years.  

Is It Worth Paying Off Your Mortgage Quickly?

If you are deciding whether you are ready for closing a mortgage quickly or not, here are some pros and cons for this idea. Generally, it depends on your personal case. However, the main pros are obvious:

  • You can save a lot of money 
  • You can gain financial independence quicker

However, sometimes there is a risk of paying off prepayment penalties for an early mortgage closing. So you need to be very vigilant while making a contract with a bank. Moreover, it may be better for you not only to save money but to invest in them. In this case, you will be able to not only gain a lot of money but also avoid different fees.

Average age to pay off mortgage Canada: Conclusion

There is no one rule that applies to all cases. However, there are some factors that you will need to take into consideration beforehand. You can pay off your mortgage even before 

an average age to pay off mortgage canada comes to you if you have a strong will to do it because you need to make several sacrifices in order to increase your income. However, the first thing you need to decide is, do you really need it? 

Leave a comment

Your email address will not be published. Required fields are marked *