Getting a mortgage for your Victoria home is what keeps you and your family secure for the long haul while you settle into your new space. Or, it can be a source of relief to prevent you from paying high rates, if you’re on unappealing mortgage terms. Around 27% of mortgages throughout Canada are expected to be up for renewal this year. Should your mortgage be one of those due for a re-up, or you’re a first-timer with this sort of thing, here are a few valuable tips to show you how to save some money on your Victoria mortgage.
Shop Around in Advance
A mortgage interest rate should be the first thing you’re looking into when trying to settle on the right mortgage. By negotiating your interest rate, you’ll save yourself thousands of dollars as the years go by. One route you could go is to try to negotiate a 1% interest rate discount. You can do this if you have a high credit rating. Speak to the best realtor in Victoria BC, if you need a bit of guidance in this regard.
Additionally, financial institutions will give you time to shop around when you’re looking to renew a mortgage or get a new one. Typically, they’ll give you a few months in advance to shop around for a mortgage before you have to pick one. Institutions allow you to take advantage of the special rate between the rate that’s pre-negotiated and the rate available once you secure the loan.
Mortgage Amortization
The rule of thumb is that the less time you have to pay down a mortgage, the less interest you’ll have to pay on it. That doesn’t mean you choose the cheapest mortgage available. It means you choose the one that has the most value for your money. When you amortize your mortgage in a shorter time, you’ll not only consider the interest rate that you’re paying but also determine what the financial benefits are for amortization.
Inquire About Prepayment Privileges
Another way to pay down your mortgage quicker is to ask for and take advantage of prepayment privileges. As interest rates rise, more of your mortgage payments each month go towards the interest rather than the principal amount.
Prepayment privileges allow you to be flexible. You can pay a percentage of your mortgage principal in advance ahead of the conclusion of the amortization period without a penalty. Some lenders will offset this by offering their best interest rate to prevent you from making these prepayments. Consult with your lender in Victoria to determine if you can make these advanced payments to save yourself the extra hassle.
Whenever you need that extra muscle to power your home purchase (or sale) over the line, Brad MacLaren is the top realtor in Victoria BC. Get in touch today to discuss your next steps with us.
