So you are reaching the end of your term on your mortgage.. Just like you visit the doctor for your annual check-up, it might be a good time to bring your mortgage in for its own check-up. This is a good opportunity to take advantage of today's best available interest rates and adopt a proactive approach to your finances. After all, whether you've recently married, added a new family member, or changed jobs, your life may not be the same as at the time you first took out your mortgage.
As you take the time to review your finances and select a mortgage option that reflects your current needs and goals, keep these points in mind.
Save on interest costs. If your finances allow you to increase your mortgage payments, you might want to choose a shorter amortization when you renew. (Amortization refers to the length of time it would take to pay off your entire mortgage). You'll have higher monthly payments, but could end up saving thousands in interest costs over the life of the mortgage.
The lump-sum strategy. If you have some cash on hand, you might want to consider making a lump-sum payment toward your mortgage principal when you renew your mortgage. This strategy can also save you on interest charges over the long-term.
Renewing your mortgage isn't just about finding the best interest rate. While that's certainly a part of the process, it may be the right time to review your overall borrowing options and tailor your mortgage to fit your current needs.
Use your home equity to reduce your overall borrowing costs.1 The equity you have built in your home can be a valuable source of financing — allowing you to borrow at better rates by using your home as security. The funds can also be used to pay for your child's education or pay for home renovations.
Better yet, you may want to consider using the equity in your home to pay off loans and credit cards with higher interest rates.
Talk to your Personal Banking Officer about options and how to apply for a mortgage that best meets your needs.
1 Subject to an updated mortgage application, verification of customer information and approval by The Bank of Nova Scotia or its applicable subsidiaries.