Do you know if you are paying to much on your monthly payments? Do you think a few dollars a month is not worth the hassle of looking at your finances? Well, you are wrong! This is a great time to look at your payments to ensure they are working for you. This simple video will show you that complacency is costing you thousands!

Do you carry balances on your credit cards? line of credit? second mortgage on your home? Debt Consolidation can help you bring your high interest debt load into one lower interest monthly mortgage payment. Learn how in today’s episode!

What is causing BC’ers to carry more debt than their other Canadian counterparts?  The cost of real estate is partly to blame.  Real Estate in BC, specifically the Lower Mainland accounts for a higher percentage of household debt than in other parts of Canada.  Specifically, people carry bigger mortgages in BC than they do in other parts of Canada.

In addition to real estate, the lackadaisical attitude that people in the western world have developed in regards to household debt is a common contributor.  People are getting used to living day-to-day on borrowed funds; rather than living within their paycheck means. Rock Lefebvre, the vice-president of research and standards for CGA-Canada states, “There is no doubt that access to credit has been one of those very influential indicators. And the other thing that has changed a lot is people’s behaviour towards debt. There has been a big change in how people view debt, and how they view money.”

“What Canadians told us when we surveyed them is they are spending more on discretionary items, and that can range from plasma televisions to a coffee in their favourite coffee shop in the morning,” he said.

What is the moral of the story? Canadians in general, but specifically people in BC need to scale back their spending in the face of the slowing economy.  BC’ers need to be aware of where their income is and how to manage their lifestyle within their income limits, versus using credit to maintain their lifestyle.

Now we know that interest rates do in fact make a difference in the amount of interest you pay, the following is a real-life example of how much money this really means.  Those of you that have purchased a home or refinanced a loan in the last 5 years or so are probably paying an interest rate of somewhere in the range of 5-6%.  So for this example we will use 5.25% on a $300,000 mortgage.  If we change the rate to 3.8%, which is a rate that is fairly standard in BC right now, you will save 1.45% interest.  In real money terms that equals $362 per month in interest and approximately $22,000 over a 5 year term.  In addition to these savings, your monthly payments are significantly lower, allowing for a positive cash flow each month.

As we would all agree, these savings are significant.  The moral of the story is to always know what you are paying on your mortgage and to be aware of the changes in interest rates, even though 1% doesn’t seem like a lot, it can make a huge difference to your payments!