(TORONTO, ON) – British Columbians expect to carry mortgage debt into retirement – which runs contrary to the expectations of the rest of the country. Nationally, Canadians expect to have paid off their home loans by the time they reach the age of 58. But B.C. lags far behind with the average homeowner not expecting to reach mortgage freedom until they are 66 years old.
A recent study by CIBC laid out the facts:
Average age Canadians expect to be mortgage free
The different expectations are most stark on either side of the Rockies. B.C. residents must be looking with envy at their Albertan neighbours who will have stopped making mortgage payments a full decade before the West Coasters have eliminated their debts. Even residents of Atlantic Canada, expect to have achieved mortgage freedom 9 years earlier than British Columbians.
Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, warns there’s a danger to carrying mortgage debt into retirement –
“Dealing with debt after you have stopped working can be a difficult burden,” advises Schwartz. “I encourage British Columbians to eliminate their mortgage debt as soon as possible to ensure a stable financial future.”
One of the reasons for British Columbians carrying mortgage debt well into their 60s is that they have not taken advantage of low interest rates to accelerate their payments to the same extent as other Canadians. Nationally, 55% of people have taken some action to repay their mortgage faster but B.C. residents come in dead last with only 47% of them taking action to get rid of their mortgages faster.
Consolidated Credit urges Canadians to get rid of their mortgage debt and offers the following tips:
- Don’t spare your spare cash – Whenever you receive unexpected money, use it for an increased mortgage payment. By attacking your debt with extra payments, you will shorten your mortgage and save thousands of dollars in interest. Using your tax refund (the average Canadian receives $1,600) is an excellent way to accomplish this goal.
- Pick up the pace – Many Canadians are paid every two weeks but only make their mortgage payments once a month. By aligning your mortgage payments with your paydays, you will be able to decrease your mortgage debt at an accelerated rate. Utilizing automatic payments straight from your bank account will make this easier and ensure that you stay on track.
- Give a little more – Rounding up your payment can make a big difference in the length, and cost, of your mortgage. Instead of paying $1,252 each payment cycle, upping it to $1,300 will decrease the amount of time it will take to pay off your debt and also save you thousands of dollars in interest.
“Mortgage debt is not ’til death do us part,'” says Schwartz. “Increasing payment amount and frequency can make you debt free faster and remove one major worry from your retirement planning.”
About Consolidated Credit Counseling Services of Canada, Inc.:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.
For more information or to request an interview with Jeffrey Schwartz, please contact:
Eric Spence, Public Relations Coordinator, Consolidated Credit Counseling Services of Canada, Inc., T: 416-915-7283 ext.1041, C: 416-731-5588, F: 416-915-5200, E: [email protected]