Do you need a Personalized Paydown Plan for your holiday bills?

Most Canadians suffer with their highest personal debt load in January, when the “holiday hit” arrives, and your credit card statements let you know just how much the festive season cost you. It’s tough if you already had outstanding debt before the holidays. That’s why now is the perfect time to discuss your Personalized Paydown Plan.

If you have at least 20% equity in your home, I can show you how to use it to roll your high-interest debt into a new mortgage for overall savings. For example, mortgage, car loan, and credit cards total $355,000. We roll that debt into a new $358,000 mortgage, including a fee to break the existing mortgage, and take a look at the result:

MONTHLY PAYMENTS
		CURRENT	NEW
Mortgage	$300,000	$1,388	$1,887
Car loan	$25,000	$495	$0
Credit Cards	$30,000	$600	$0
Total		$2,483	$1,887
Current mortgage 2.79%, 5-yr term, 25-yr amortization; new mortgage 4.89%, 5-yr term, 30-yramortization; car loan 7%, 5-yr amortization; credit card payment based on 2% of balance. This serves as an illustration. purposes only. OAC. Subject to change.

That’s a savings of $596 each month. Now let's decide how you can use that $596. If you apply your prepayment privileges to your mortgage, you could reduce your amortization from 30 to 18 years. Or, invest it in an RRSP, RESP, or TFSA to reap tax benefits and grow your wealth.

You could also consider putting a portion into a dedicated “December fund” so the next holiday season doesn’t bring financial stress. Instead, you can enjoy guilt-free giving, knowing the bills are covered.

While refinancing is not an option for everyone and every situation, I have access to other financing options that can help. If you think you could benefit from this kind of financial restructuring, get in touch, and we can review your situation carefully to determine the best path for you.

Do you need a Personalized Paydown Plan for your holiday bills?