Tackle your debt using the equity in your home
Debt is a four-letter word Canadians don’t want to talk about. According to a recent poll released by CIBC, 26 percent of Canadians say paying down debt is their top personal finance priority for 2019. It’s the ninth straight year this issue has landed at the top of Canadians to-do list in CIBC’s annual survey.
Other key findings in the survey are:
- Among the 29 percent of Canadians who have taken on more debt in the past 12 months, top reasons cited are to cover day-to-day items (34 percent), purchase a new vehicle (24 percent) and pay for a home repair or renovation (20 percent)
- Little changed from last year, Canadians say their top sources of debt are: credit card (45 percent), mortgage (31 percent), car loan (23 percent), line of credit (22 percent), personal loan (11 percent)
Canadians are buried by debt
Recent data suggest that Canadians haven’t made much headway in managing their debt. The household debt-to-disposable-income ration reached 173.8 percent in the third quarter of 2018. That was a near-record, indicating that Canadians owe almost $1.74 for every dollar of disposable income. It’s disturbing that Canadians have one of the highest debt levels in the world. But there is a solution.
Is there such a thing as good debt?
The answer is yes! Your mortgage is good debt. It is probably the largest debt that you’ll ever hold and can be a superb investment for you if appropriately managed. Your mortgage debt is far cheaper than expensive personal loan and credit card debt. So if you are feeling burdened by your debts, why not consolidate them into one mortgage with a cheaper interest rate? Use the equity in your home to refinance and pay-off your non-mortgage debt.
In the above scenario, you can reduce your monthly payments by $800 by utilizing the equity in your home!
Don’t work for debt; let debt work for you!
That may seem odd to some people, but your mortgage can be part of a prudent financial strategy. If you are buried in debt, can you really afford not to consolidate your debt?
Not Sure Where To Start?
Start with the
Top Questions To Ask Your Mortgage Agent!
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