5 Ways to Save on Your Mortgage

Buying a home is undoubtedly a major milestone, but the financial burden associated with mortgages and high interest rates can be overwhelming. Before you shelve the dream of owning your ideal home, consider these five strategies to save on your mortgage.

Increase Your Credit Score

A high credit score reduces the perceived risk for lenders, potentially leading to lower interest rates. Boost your credit score by adhering to these tips:

Maintain your credit card balance below 30% of the credit limit.
Timely payments for credit card bills, utility bills, and loans.
Avoid opening multiple credit accounts.
Regularly monitor credit reports and payment history.
Cultivate a diverse mix of credit.

Fine The Best Mortgage Rates

Finding the best mortgage rates requires diligence. Invest time in researching and comparing offers from different lenders. Keep an eye on the current market trends to identify favourable deals. Seeking guidance from a mortgage broker can also aid in securing the most competitive rates, potentially saving you thousands of dollars in the long run.

Raise Your Down Payment

If your dream home is on the horizon, redirect funds from non-essential expenses or future plans towards increasing your down payment. Many lenders require mortgage insurance for down payments less than 20% of the purchase price. By aiming for a down payment of 20% or more, you can circumvent the need for additional insurance costs.

Make a Lump-Sum Payment to Your Principal

Making lump-sum payments towards your mortgage principal can yield substantial long-term savings on interest. Numerous lenders permit prepayment privileges, allowing borrowers to make annual lump-sum payments of 10% to 20% of the original mortgage amount without incurring penalties.

Explore Refinancing Options

Refinancing your mortgage involves swapping it for a new one with more favorable terms and interest rates. While this can be a savvy financial move, carefully review your existing loan agreement for potential penalties or fees associated with breaking your current mortgage.