Sunday, December 13, 2009

Mortgage Roundup

It is close enough to the end of the year that I can round up our mortgage progress for 2009.

We only have one more payment left, due to come out on Christmas day and I am able to calculate what we end up with.

We started Jan 2009 with mortgage balances of:
  • $140055.95 on the main house, 10 yrs 3 months amortization, 2.60% rate
  • $48462.59 on the ski condo, 10 yrs 2 months amortization, 2.74% rate

We end Dec 2009 with mortgage balances of:

  • $116458.84, 5 yrs 8 months, 1.35% rate
  • $34626.77, 4 yrs 7 months, 1.50% rate

For a decrease of:

  • $23597.11 in principal for main house
  • $13835.82 in principal for ski condo


  1. wow, amazing progress. Can you be my financial advisor please!!!!

  2. Nice progress. Canadian interest rates are ridiculously low.

    Why pay off both mortgages at the same time? Why not get rid of the condo (higher interest rate), then focus your attention on the main house?

  3. Hi Lizzie!

    Thank you! I really don't have any special financial traits! Our progress is the result of some big sacrifices and a lot of frugality!

    @ Executioner;

    We have "closed" mortgages which means we pay a penalty for breaking it.

    There are also yearly limits to the amount of prepayments allowed without penalty. For example, I will not be able to put any extra monies towards the ski condo until May.

    My biggest mortgage wish right now is to have both done at the same time.

    D is happy with the current amortization and would like me to stop all prepayments and let him handle the next 5 years even if it means re-negotiating in 3. I just don't want to see it last longer than 3 more years.

  4. Ah, I see how it is. You get sweet interest rates, but you can't pay off your mortgage before a certain time? Is that right?

  5. Well, our mortgage rates are sweet for now. I'm not looking forward to them rising again.

    When you get a mortgage here, you commit to an overall time frame ie. 15, 20, 25, 30, 35 yr amortization.

    Then you pick the type of mortgage, variable or fixed rate, open or closed.

    Finally you pick your term ie. 1-5yrs. That and your credit rating will determine your rate.

    You are committed for the duration of the term to whatever rules apply to your mortgage. Our banks don't like it when you pay too fast and too soon so they penalize.

    Open mortgages allows you to pay it off any time you want but the percentage is quite high and the term short -- currently 6.55% for a max. 1 year term.

    When the term is up, then you renegotiate for the next block of time, chosing the type of mortgage product you wish and this continues until you reach the end of your amortization.

    Thus, you are privy to whatever is happening to the world at the time of renewal. We are just "lucky" that the rates are low because the economy has tanked.

    Two years ago, we amortized for 12 years, taking a 5 year variable, closed mortgage. When the term ends, I don't want to renegotiate as I would likely have to at a much higher rate.

    That's why we are doing what we are doing, within the confines of our mortgage rules. Luckily, we can get very close to our goal despite their rules.

    This is the 4th and 5th house I've bought in my lifetime and the first time rates have fallen so dramatically.

    Also, in Canada we are not allowed to write off mortgage interest in our income tax.