Why are you paying credit card interest rates?

Let’s start off with a couple of quick questions to see if this article can help you or not.

  1. Do you have a credit card balance right now?
  2. Are you paying the minimum or close to it and not making any progress on paying down the principal?
  3. Do you own a house and have equity in it?

Credit Card Balance

The answer should be simple. By consolidating your credit card or Line of Credit debts into one MUCH lower mortgage payment, not only are you improving your monthly cash flow substantially, but you are saving a TON on interest payments. Take a look at this quick example to see for yourself and pay off your debts.

Debt Amount Credit Card Interest/mnth Mortgage Interest/mnth Monthly Savings Annual Savings
$10,000 $150 $22.41 $127.59 $1,531.08
$15,000 $225 $33.63 $191.37 $2,296.44
$25,000 $375 $56.04 $318.96 $3,827.52
*O.A.C. Rates and payments subject to change without notice.

$15,000 is a very realistic amount of debt for the average consumer to have. Maybe you just purchased a vehicle, sent a child to school, renovated your basement, or had the foundation crack in the house and had to do an emergency repair. Whatever the reason is, good or bad credit, you could potentially be saving $2,000 – $3,000 every year. That is a lot of money.

What about paying off my mortgage faster, won’t this add onto my total mortgage amount.

The answer is absolutely yes. But whether that $15,000 is on your mortgage or on a credit card; debt is debt. At least if it is on your mortgage, you are paying down the principal MUCH faster. AND guess what? That $3,000 per year you’re saving can be paid as a lump sum right into your mortgage if you want and over 5 years you have paid down an additional $15,000 off your mortgage and eliminated that credit card debt. Pretty sweet deal isn’t it?

GOOD CREDIT. SELF-EMPLOYED. BAD CREDIT. Doesn’t matter, there is a solution for everyone. Educate yourself and speak to a professional. There is most likely a better option for you.

Also, ask us about our 2.49% 5 year rate special!

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Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (877) 335-4486.

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