The majority of Canadians expect interest rates to rise in the next five years – Freedom 65? One third of those in the survey expect to have a mortgage on their 65th Birthday!
According to a BMO poll released on June 15th, 2015, Canadians estimate they will pay approximately $60,000 in interest over the life of their mortgage, with those on the West Coast expecting to pay significantly more before they become mortgage free.
The senior Economist, BMO Capital Markets, also noted that it’s not surprising that British Columbians are paying the most mortgage interest, as house prices in our province are the highest in the country. The average was $623,000 in April, compared with $437,000 nationwide and $456,000 in Ontario.
The poll also revealed that on average, Canadians expect to become mortgage free by the age of 59 – up from 58 in the last two years. Furthermore, one third (31 per cent) expect still to be making mortgage payments on their 65th birthday.
“Considering a shorter amortization of 25 years or less can help Canadians save thousands of dollars in interest rate costs over the life of the mortgage; this improves long-term affordability, while ensuring Canadians pay down their mortgage faster and begin building equity in their home sooner,” says the Vice President of Personal Lending & Investment Products, BMO Bank of Montreal.
Other advice given was to Stress-test your mortgage: Gauging the stability of your mortgage by stress testing it against a higher interest rate can help establish a plan to ensure long term affordability.
Original article: www.marketwatch.com