Are you the type of person who sees a penny on the sidewalk and steps right over it? You might be missing a golden (or copper) opportunity to pay off your home loans!
Recently, a man in the U.S. state of Massachusetts made news when he paid his last mortgage installment with tens of thousands of pennies. Thomas Daigle collected the coins for more than 35 years, starting shortly after he and his wife moved into their home, according to the Milford Daily News. All told, his final mortgage payment weighed more than 360 kilos!
“It was something I wanted to do,” Daigle told his hometown newspaper. “I always follow through. I was just praying I didn’t die first.”
Have you ever wondered how much your mortgage payments would weigh? Let's check out a few factors to find out:
• The average price for an existing home in Canada is about $375,605
• Five-year mortgage rates are pretty low right now, so let's assume 3.09 percent interest
• New rules from Ottawa put the maximum amortization period at 25 years
• You should really make a 20 percent down payment, but not everyone does, so let's assume a 10 percent down payment
• Canadian pennies weigh 2.35 grams
Using a mortgage calculator, we can see that a $375,605 mortgage with a 10 percent down payment and a five-year rate of 3.09 percent will give us a monthly mortgage payment of $1,615.43. Multiply that by the weight of a Canadian penny, and you've got a monthly mortgage payment weighing just under 380 kilos!
Of course, there are all sorts of things you can do to pay off your mortgage before its due and ways to negotiate for a lower rate. If you have an existing mortgage, it might be prudent to refinance your loans to take advantage of today's low interest environment. You could also save up and make yearly lump sum payments against your principal mortgage amount to more quickly knock down your debts. This will save you money – and kilos! – on interest payments down the line.
If you're a first-time homebuyer entering the market, make sure your credit score is in tip-top shape so you can negotiate for the best mortgage rates you can. You might also want to start hitting the gym – those mortgage payments can get heavy! How will you prepare for your mortgage?