Saying goodbye to your mortgage sooner doesn't mean saying goodbye to your savings

• 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.

About Scotiabank
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.

Background:

Regional Breakdown:

Attitude Towards Paying Off Mortgage Faster
Possible to pay off mortgage faster without impacting lifestyle		Total	Region
			Atlantic	Quebec	Ontario	Man/Sask	Alberta	BC
Agree strongly		27%	27%	31%	26%	24%	29%	25%
Agree somewhat		40%	41%	31%	42%	43%	41%	42%
Neither agree nor disagree		13%	12%	15%	13%	18%	13%	11%
Somewhat disagree		11%	10%	12%	10%	11%	12%	14%
Strongly disagree		7%	9%	7%	8%	4%	4%	8%
	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 faster	Total	Region
		Atlantic	Quebec	Ontario	Man/Sask	Alberta	BC
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%
Other	1%	2%	-	-	-	-	5%
None	20%	16%	15%	22%	26%	18%	17%

Main reason have not taken additional steps	Total	Region
		Atlantic	Quebec	Ontario	Man/Sask	Alberta	BC
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%	-
Other	6%	-	6%	10%	-	-	-

 

 

 

SOURCE: Scotiabank

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Diana Hart
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