It notes that while it may initially be an unpopular decision, in the long run, it can have tremendous benefits. By making such an investment, a homeowner can reduce the amount of interest they owe on their loan, and potentially save thousands of dollars in the process.
The article starts by noting that many Canadians are expecting a tax refund in the coming months, and will be looking for ways to use it. While for some, this may mean a shopping spree or a trip, for others it may be prudent to put it towards their mortgage.
The article cites the example of a borrower with a $400,000 loan, whose current interest rate is 5%. It notes that if they were to use their tax refund of $4,000 to pay down their mortgage, they would save $24,000 in interest payments over the life of the loan. It also states that this amount could be substantially higher depending on the interest rate and the length of the loan.
The article then goes on to discuss the advantages of putting one’s tax refund towards their mortgage. It states that by paying down one’s principal, they are effectively reducing the amount of interest that they will be charged over the duration of the loan. Furthermore, it argues that by doing this, the individual will be able to pay down their loan faster and potentially become mortgage-free much sooner.
The article then notes that while this strategy may not initially be popular, it can ultimately be very beneficial in the long run. It outlines the basics of how the program works and offers tips for borrowers who are considering using their refund to pay down their mortgage.
In conclusion, the article highlights the potential benefits of using one’s tax refund to pay down their mortgage. It argues that while it may not be the most popular decision, it can be highly advantageous in the long term and can save an individual a substantial amount of money in interest payments. It also provides advice and tips for those who are considering such a move.
This article was contributed on Nov 28, 2023
