RRSP or Pay down your Mortgage

I've noticed several articles written lately one by MoneySense I believe it was the Jan/Feb issue and the other being Canadian Business August issue debating whether it make more sense to pay down your mortgage, when your a younger couple or contribute to your RSP's. Both publications offer excellent points MoneySense to sum it up says pay off your mortgage as it's your largest debt if you can pay it off by your early 40's. Then roll what use to be your mortgage payment into your RSP. Canadian Business basically stands on the point of with today's interest rates your much better investing your money in your RSP and just continue paying your normal mortgage payments and at the end of the year when you file your taxes you'll earn 30 cents on every dollar that your contributed to your RSP's.

Case Study using our family:
Pay off Mortgage first: $81,000
Increase payments by 20% max allowed by mortgage company
Would be paid off within 10 years and 4 months
Savings of $9933.75 in interest
Roll mortgage payment into RSP when the house would be paid off by the time I was 43
Retire at 65 on RSP's calculated at 8% ROI would give us $786861.54

Invest in RSP's at 10% annual salary over the course of 33 years with 8% ROI on RSP's
would give us $786872.33 basically $10 more when I retire
Now if we took the 30 cents on each dollar and paid the mortgage in a lump sum at the end of the year from tax refund it would pay off the mortgage in 10 years and 9 months.
Savings of $9407.79 in interest

For our family we decided to go with pay off the mortgage first for a couple of reasons:
First - were set on a varible rate the more we can take off the principal faster the less were exposed if interest rates jump like they did back in 1979.
Second - it's our largest debt.
Third - you always end up with other plans for your tax refund when it comes around I know we wouldn't end up putting it on the mortgage meaning we would be paying off the mortgage for the full term.

You have to decide what works best for your family there's alot of great calculators out there to figure out your RSP's and Mortgage Amortization run the numbers and find out what works best for you.

Mortgage Brokers

As a homeowner I personally found the easiest way to access financing was through use of a mortgage broker as opposed to dealing with the banks. Here’s the simply reason why you walk into your bank to qualify for a mortgage that bank will either approve you or deny you based on their own qualifications. Your allowed when shopping for a mortgage 15 days on your credit report that each inquiring on your report will only count on one due to the fact with such a big purchase naturally you want to shop around for the best deal. So then the question comes back as to why go to your bank and basically only use the power of one, not to mention how do you know your getting the best deal?

Using a mortgage broker such as LendingMax has access to over 80 different lenders including all of the Big 5 banks. So your guaranteeing yourself one the best rate without having to run to several different banks yourself saving you time and also money as a broker is paid by the lender not you, unless your mortgage is more difficult to obtain due to credit rating, self employed or looking for a 0% down mortgage but even then there still might not be a fee charged. Do yourself a favor if your interested in getting a mortgage just head over to LendingMax they have a instant mortgage approval right on their website just fill out the form and within a couple of minutes you’ll know if you qualify and if so for how much. That’s the way we did it we used a broker and have never looked back.