Press release from CNW Group
Saying goodbye to your mortgage sooner doesn't mean saying goodbye to your savings
Tuesday, April 23, 2013
Saying goodbye to your mortgage sooner doesn't mean saying goodbye to your savings07:00 EDT Tuesday, April 23, 2013
- Scotiabank Poll finds homeowners saying they could pay off their mortgage faster without impacting their lifestyle
TORONTO, April 23, 2013 /CNW/ - This spring homeowners are feeling optimistic about taking a bite out of their mortgage without having to cut back in other areas of their lives. According to Scotiabank's Mortgage Landscape Study, nearly two-thirds of mortgage holders (67%) agree that it's possible to pay off their mortgage faster without impacting their lifestyle. In fact, most mortgage holders (59%) say they believe adding $20 per month to their mortgage payment would have no impact on their finances.
"Sometimes when people think about speeding up their mortgage payments, they get into the mindset that their only option is to make a large lump sum payment in order to make a real dent," said David Stafford, Managing Director of Real Estate Secured Lending at Scotiabank. "While periodic lump sums and even switching to bi-weekly payments are great options, increasing your payments by small amounts, like $20 per month, can have an incredible impact over the years. This small amount translates into paying off your mortgage years sooner and every dollar that you don't have to pay interest on for a 20 or 30-year mortgage can add up to real savings."
When asked if they own or rent their primary residence, 35% of Canadians own with a mortgage, 29% own without a mortgage, 32% say they rent and 4% listed 'other' as their answer. Of those with a mortgage, half (51%) say they have spoken to their mortgage provider about how they can become mortgage-free faster.
Most mortgage holders (79%) have taken at least one step to pay off their mortgage faster. The top steps Canadians have taken to say goodbye to their mortgage faster 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%).
Meanwhile, 21% of mortgage holders who have not taken additional steps to pay off their mortgage faster cited they don't have the funds available (49%), have other payment priorities (27%) or are not sure what steps to take (8%).
"With the allure of rates in the marketplace, it's encouraging that many Canadians are opting to take the small steps necessary that will have a big impact towards shaving years off their mortgage," said Stafford. "For those unsure how to balance their budget to increase their mortgage payments or are just looking for advice on what steps might work best for them, we recommend meeting with a financial advisor. An advisor has an overall view of your financial situation to help you find a payment path that will work for you, including setting up pre-authorized payments and taking advantage of cash back credit products."
About the polling data
Using Harris/Decima's proprietary panel of Canadians, a total of 1,000 completed surveys were collected from a random sample of panel members across Canada. The study was conducted from February 14-25, 2013. Subsequent to completion of the study, the data was weighted by region, age, and gender proportionate to the population of homeowners. To qualify, respondents must currently own their primary residence.
Scotiabank is a leading multinational financial services provider and Canada's most international bank. With more than 82,000 employees, Scotiabank and its affiliates serve some 19 million customers in more than 55 countries around the world. Scotiabank offers a broad range of products and services including personal, commercial, corporate and investment banking. In December 2012, Scotiabank became the first Canadian bank to be named Global Bank of the Year and Bank of the Year in the Americas by The Banker magazine, a Financial Times publication. With assets of $736 billion (as at January 31, 2013), Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS). For more information please visit www.scotiabank.com.
|Attitude Towards Paying Off Mortgage Faster|
Possible to pay off mortgage faster
without impacting lifestyle
|Neither agree nor disagree||13%||12%||15%||13%||18%||13%||11%|
|Top 2 Boxes - agree||67%||68%||63%||68%||66%||69%||67%|
|Bottom 2 Boxes - disagree||18%||19%||19%||18%||15%||16%||22%|
|Steps Taken to Pay Off Mortgage Faster|
Steps taken to pay-off mortgage
|Increased frequency of regular payments||45%||45%||47%||43%||34%||49%||51%|
|Renegotiated for a lower mortgage rate||29%||22%||29%||30%||19%||36%||29%|
|Increased amount of regular payments||26%||14%||22%||30%||21%||26%||22%|
|Made additional payments||26%||29%||13%||31%||32%||16%||29%|
Main reason have not taken
|Don't have the funds available||49%||51%||45%||49%||67%||42%||51%|
|Have other payment priorities||27%||30%||29%||25%||18%||35%||33%|
|Not sure what steps can take||8%||9%||9%||6%||10%||7%||16%|
|No need to pay faster||3%||-||5%||3%||5%||-||-|
|Not much left owing||2%||-||-||-||-||16%||-|
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