Tag Archives: mortgage

The Other Cost of Debt

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Recent years have caused much debate over the impact and opportunities available to Canadians due to the high availability of cheap credit. Much has been written in personal finance circles about how the costs of credit cards, mortgages and zero percent financing on car loans can add up over time, regardless of low rates. The fact is that the hard costs of borrowing money (ie. interest payments), although not always intuitive or simple, can always be quantified. That said, I’ve found there is another possibly even more substantial cost to borrowing money which makes up the topic of today’s post. Continue reading

The Canadian Approach to Debt

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Chart - Canadian Debt Indicators

A paid off home has long been considered a fundamental of a good financial plan and something I hope to accomplish in my thirties. Currently 3 years into the first 5-year mortgage term with my lender, I have no plans to refinance and incur the associated financial penalties to lower my rate a few points. However, I do like to keep note of current lending rates and if you are a Canadian, you probably heard that the Bank of Canada cut it’s key overnight lending rate by 25% this week. While the jury is out on whether this was a good move for Canadians, my preoccupation with lending rates in general is purely out of curiosity as it has little bearing on my current financial plan. If the rates were to move sharply, whether up or down, my plan would be the same: to continue to pay off my mortgage as quickly as possible. Before I get into why, let me back up a little. Continue reading