Of Prime Interest: Don’t ignore mortgage review

We tend to become complacent about our mortgage payments and we could be saving a lot of money with a change.

  • Sep. 1, 2015 5:00 p.m.

Plenty can change in someone’s life during the course of a standard five-year mortgage.

It could be a career change, kids, retirement or newfound money or such a major event is on the horizon. All can affect the type of mortgage that best meets your financial needs and limitations.

A lot of people don’t like to face up to it but doing an annual financial check-up is a very smart thing to do.

We often just wait for a renewal letter before looking at our mortgage, and even then we are likely send the contract back without considering if it is the best rate possible and meeting our current needs because we feel changing providers or the terms is futile.

You should put just as much thought into a renewal or a review as you did when you signed the initial deal.  We tend to become complacent about our mortgage payments and we could be saving a lot of money with a change.

Rates are an obvious thing to pay attention to. The more adverse you become to risk, the less likely a variable mortgage will be right for you.

If rates are going up, make sure you can make the higher monthly payment that may come at renewal time, or lock into a fixed rate if you’re on a variable. If rates are dropping below your existing rate, you might want to refinance or renew early.

Even though banks are in the business of getting as much interest from you as they can, many will allow people to pay a lump sum of the principal on the mortgage’s anniversary and increase their monthly payments. An extra $100 a month on a standard $200,000 mortgage could save almost $18,000 in interest and shorten the amortization period by about four years.

Or maybe you just want to consolidate higher-interest unsecured debt into your mortgage. Rolling that into your mortgage can significantly save on interest costs and that will help you get out of debt sooner

A mortgage can also help you become more tax efficient if you’re thinking of investing in a business, buying a rental property or putting some money into mutual funds or the stock market.

The interest paid on money borrowed on a principal property can be written off against such investment revenues.

But the biggest reason for making changes to your mortgage mid-stream may be because it could be a lot easier to do something before your situation changes.

Just Posted

Registration opens for Okanagan Singer-Songwriter competition

Lake Country - The seventh annual competition auditions are held around the Okanagan

Youth athletes get $22k from Kelowna builder

Mission Group supports a group of ten elite cyclists and triathletes from around Kelowna

UPDATE: Tsunami warning cancelled for coastal British Columbia

Warning issued following 7.9 earthquake off Kodiak, AK

Coordinated search finds missing Kelowna boy

All available police resources were called in to help find a missing boy Monday afternoon

Kelowna students leave for downhill challenge

A group of students from UBCO is ready for annual concrete toboggan race

Testing the Google Arts & Culture app

Going face to face with art

‘The tsunami alarm failed my household’: North Coast residents concerned over sirens, alerts

People living in northern communities share how they learned about Tuesday’s tsunami warning

Flying squirrel touches down inside Salmon Arm home

Rodent jumps around residence before homeowers encourage it back outdoors

Snowboarder dies at Vancouver Island ski resort

Death at Mount Washington Alpine Resort

Taylor: Humans the theory makers

Lake Country columnist Jim Taylor writes weekly in the Calendar

Man faces 48 charges in string of random Toronto shootings

The string of unprovoked shootings began Jan.9, say police

Slayer adds Penticton to North American tour

Slayer adds the South Okanagan Events Centre as a stop on their last tour

‘Shape of Water’ producer, Christopher Plummer among Canadian Oscar nominees

Guillermo del Toro film about merman romance earns 13 nominations

Vancouver Canucks confirm participation in NHL Young Stars

Canucks confirmed participation, at least for this year, in the NHL Young Stars event in Penticton

Most Read