• Dave Fullerton

5 Solutions to Lessen Mortgage Stress

When you're feeling overwhelmed with your mortgage, it can seem like there's nothing that will make the situation better. But remember - even though we might not see change happen overnight, sometimes these tips and tricks work over time!


So what should be done first? Start small by testing out new habits for managing the stress in five easy steps:


1. Identify the causes of your anxiety

What is it specifically about your mortgage that makes you feel anxious? Some everyday worries include:

  • Do I have enough money in my account to make this month's payment?

  • How much money am I going to end up paying in interest?

  • Are rates going up again soon? How will I keep making payments when rates go up?

  • If something happens to my partner, how will I pay the mortgage?

It's time to take back control of your mortgage worries. Once you identify what is causing them, some steps can be taken for a solution!


2. Match your payments to your paycheque

Your mortgage payment is essential. If you're concerned about not being able to cover your monthly obligations, just set the dates of when payments are due, so they align with your payday. As long as you get paid, you'll avoid insufficient fund fees negatively impacting your credit.


3. Pay biweekly to lower long-term mortgage costs

Worried about how much you'll pay in interest on your mortgage over its lifespan? Compound Interest is great when received but not so fun to deal with.


Looking for a solution? When you pay monthly, you're making 12 payments per year. Switching to biweekly payments means you'll make 26, the equivalent of 13 months of payments. That extra payment goes toward your mortgage principal. Depending on your mortgage amount, you could shave one or more years off the mortgage this way.


Another way to help reduce your long-term costs when you can't make extra lump-sum mortgage payments is to switch to accelerated payments, where you'll make slightly higher weekly or bi-weekly payments., Still, those small increases make a big difference over time.


4. Renew your mortgage early to get a lower rate

Fluctuating interest rates are a fact of life. Chances are that at some point during the time you have a mortgage, you'll see rates go both up and down.

Consider an early renewal to take advantage of current rates to help reduce your mortgage stress. Renewing involves starting your existing mortgage into a new term with a new rate before it expires. You could early renew a mortgage with the same term you have now, for example, three years. Or you could choose a longer-term mortgage, say a five-year mortgage, give you some peace of mind for a longer time. Weigh this option carefully: depending on your mortgage terms and the time left on your current mortgage, you could face a prepayment penalty.


Depending on your situation, consider a blended rate that combines the best features of both instead of just renewing. A blended mortgage can reduce your current mortgage rate and extend your term to keep that rate longer without a mortgage prepayment penalty. This way, you can reduce some monthly payments without any nasty surprises in future!


5. Get insurance to help cover your payments

In some households, couples have a mortgage neither of them could pay on their own, and other families might depend on one spouse's income to cover their financial obligations. In these situations, the concern over what happens if one spouse can't make payments can lead to major financial stress.


One way to ease tensions is to add an extra layer of security with insurance. If one spouse can't work due to a qualified critical illness, some types of insurance could cover your payments or mortgage balance.


Bottom Line

Homeownership is one of life's most important but can also be stressful. Sometimes we find ourselves worrying about our mortgages more than anything else. So take some quick action today by pinpointing what YOUR biggest worry related to owning a home might b so now when problems arise, tomorrow will seem less overwhelming.