How One Client Will Pay Off Their Mortgage 10 Years Faster
When most people think of getting a mortgage, they think of one thing: getting the lowest rate. But if that was all that mattered, this client wouldn't be on track to pay off their mortgage years sooner than originally planned.
I have a client who got a 25-year mortgage back in 2023. Fast forward just 2.5 years later, and their mortgage is already set to be paid off in 18 years. Eventually, I believe we’ll bring that timeline down even further to 12–15 years. Here's how we did it:
Step 1: Active Mortgage Monitoring
I regularly monitor all of my clients' mortgages. In this case, I spotted an opportunity to move the client to a better option, saving 0.8% in interest. Instead of pocketing the monthly savings, I advised the client to keep their payments the same as before. This simple shift meant that more of each payment went toward the principal, not interest.
Step 2: Better Mortgage Product
By switching to a more flexible mortgage, the client also gained access to a Home Equity Line of Credit (HELOC). This gives them access to equity for future investments, renovations, or emergencies. Additionally, they can use the HELOC to make their mortgage tax-deductible.
Step 3: Accelerated Biweekly Payments
We also switched their payment frequency to accelerated biweekly, which automatically shortens the amortization period by making the equivalent of one extra monthly payment per year. This small adjustment can shave a couple of years off a mortgage. Nothing significant, but it’s something.
Step 4: Strategic Tax Planning
Because of the structure of their new mortgage, this client can now make their mortgage tax-deductible. That means:
• Bigger tax refunds.
• More funds to invest monthly.
• Faster mortgage payoff.
As this client pays down their principal, the HELOC will grow automatically. With this new room, they can borrow to invest in income-producing assets, converting their non-deductible mortgage debt into tax-deductible debt. With this, they’ll generate bigger tax refunds, which they can then use to prepay their mortgage, knocking more years off their amortization.
This is what happens when you work with a mortgage professional who doesn't just get you a mortgage, but actively manages it.
Final Thoughts
A bank might offer a great rate, but they're not going to check in regularly to see if there are better options. The advice you get around tax efficiency or long-term planning may be limited, or non-existent, and ultimately depends on the bank rep.
My goal is to help my clients save time and money, both now and long term.
If you're looking to get a mortgage in Vancouver that is actively monitored and managed by a professional, click the link below to book a call. Let's create a strategy that works for you, not the bank.