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Fewer Canadians are Paying Extra with Mortgages

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Unlike the situation about six years ago, the interest rates nowadays are considered as a steal. During those times, 2.25 percentage points dropped down from the fixed 5-year discounted interest rate. This gives the mortgagors a 30% more principal in their standard mortgage in the first five years.

 

Though it has been used as a motivator, many still do not consider making this condition as a motivator for them to pay extra with their mortgages. This is at least not in accordance of their latest survey that is out. CIBC found out that 55% of mortgagors nowadays are starting to accelerate from their mortgage amortization from about 68% from the same survey conducted the previous year.

 

Though CIBC did not provided details with how people are spending their spare cash, it has been suggested that people are spending it for summer vacation and also home renovation. These people are spending about 30 to 20% within 2014 respectively.

 

Based from the said survey, the approximate age of Canadian mortgagors who are expecting to be free from mortgages is now 58 as compared to 57 the previous year. This fact only shows that the length of time that mortgagors will settle their mortgages has lengthen than how people expect it to be.

 

On the other hand, there are also homeowners who plan in keeping their mortgages past their retirement age and not paying it till they reach the age of 66. Yet, this kind of strategy will only make residents bequeath their mortgages to the next generation, in a family’s case, it’s the kids who could bequeath these mortgages.

 

Though there are many reasons on why Canadians would pay off their entire mortgages and why there are also those who would put it off for longer years, the survey still shows that more and more people are opting to pay just the right amount and not put in extra payments to end their mortgages the soonest possible time.

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