Who is this for?
Anyone applying for a mortgage will need to determine how they will pay for their new home. London Life has been in the mortgage business since 1874, and offers a variety of payment options to accommodate your budget.
For example, if you qualify you can choose to pay on a monthly, semi-monthly, accelerated bi-weekly or accelerated weekly basis.* New homeowners will also need to select an amortization period: While a 25-year amortization period is a common choice, selecting a shorter period can save you money in the long run. Put simply, the more you pay and the faster you pay it, the sooner your mortgage will be paid off.
How will this help me?
That depends on what your budget will allow. You can save thousands of dollars in interest and pay your mortgage off sooner by simply increasing the frequency of your mortgage payments.
For example, by using double-up payments – or paying twice your regular mortgage payment on any payment date – you can apply the surplus to your principal balance and save on interest costs. You could also opt to increase your payments by a set amount (such as 15% of your regular principal and interest payments) every calendar year, helping you save on interest and build up home equity faster.*
What else do I need to know?
Remember that you can significantly reduce your mortgage payments by providing a large down payment at the time of purchase. In addition, making a down paymentOpens in a new window of 20% or more will help you avoid the costs associated with acquiring mortgage loan insurance.
Other costs to consider
There’s more to buying a home than providing a down payment and setting up a mortgage payment schedule. There are many other costs associated with purchasing a home, including legal fees, processing fees, general sales tax (on newly built homes), land transfer taxes, home inspection fees, survey fees and moving expenses.
Keep these expenses in mind when determining your mortgage payment schedule and down payment.
Building home equity
Paying down the outstanding balance on your mortgage will help you build equity in your home. Home equity is the difference between the estimated value of your home and the total debt registered against it, including mortgages. Increasing your home equity can help to increase the amount of money you can borrow.
* Subject to London Life lending criteria and mortgage terms.
Connect with an advisor
Working with a financial security advisor can provide you with the tools and expertise you need to plan for the future.