Most People think when you get a mortgage you're stuck with it for 30 years, but what they don't realize is by using  a couple of easy and painless ways to make some extra principle payments you can cut years off the life of your mortgage and save thousands of dollars in needless interest costs. Here are a couple of easy strategies you can use:

1. Round up to the nearest hundred

This is an easy strategy to take advantage of, and the results are dramatic!

Let's say you have a mortgage of $100,000 over 30 years at 8% interest. The monthly payments would be about $734 dollars a month. Now, let's see what would happen if you rounded that payment to the next $100 by increasing your payment by $66 extra each month. 

Just this one simple strategy will save you over $48,000 in interest payments over the life of your mortgage, but it will also shorten the length of your mortgage by 7 1/2 years!

2. Use Your Income Tax Refund To Make One Time Pre-Payments

Let's say you have that same $100,000 mortgage, and you have a $1000 tax refund this year. [very possible with your new homeowner deductions] If you take that $1000 and apply it to your mortgage...you'll save over $8600 and shorten your mortgage by 1 year and 1 month! Not bad for a simple one time pre-payment.

3. Start Out With a 15 Year Mortgage

One of the best things you can do -- if you can afford it -- is to start out with a 15 year mortgage instead of 30. It's actually not that much more expensive, and the interest you save is incredible.

With the same $100,000 mortgage at 8% over 15 years, your payment would be about $200 more ($955) and you would be paying $72,017 in interest over the life of your mortgage instead of $164,160! 

That's worth considering. 

N. B. This is not a loan approval. This calculator is designed to give you a general idea of what you can afford when you purchase a home. 

Many first-time home buyers are amazed to find out how low their mortgage payments can actually be compared to the rent they're currently paying.

You can use this form to calculate your estimated monthly mortgage payment given a specific mortgage amount, using a 25-year amortization (most typical in Ontario) and a specific annual interest rate.

Remember, the specific mortgage amount doesn't include your down payment. Therefore, if you have a down payment of $30,000 and you want to buy a home worth $200,000, then only put $170,000 in as your mortgage amount.

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