Financial Benefits
When shopping for a mortgage, most Canadians ask one question, “What’s the rate?”
Of course, interest rate is important, but what if we asked a different question, “How soon can I pay off my mortgage?”. We call this “Mortgage Freedom Day” and for Canadians in the Tax Deductible Mortgage Plan (TDMP), this date comes many years sooner.
The key is extra payments. Many Canadians will accelerate their mortgage by converting to bi-weekly payments or making an occasional extra payment, but the Tax Deductible Mortgage Plan forces extra payments every month!
By greatly accelerating the pay down of the mortgage with self funding extra monthly payments and annual Tax Refunds, Mortgage Freedom Day can arrive in nearly half the time. This translates into a future savings of tens or even hundreds of thousands of dollars.
Here’s an example:
Jim and Lisa Smith are 38 years old with a marginal tax rate of 39%. They purchased their last home for $500K and required a $300K mortgage at Closing.
Jim and Lisa are concerned that they may not have enough money to guarantee a comfortable retirement. They decide to further accelerate their mortgage strategy with TDMP.
On advice of their Financial Advisor, they borrowed to invest in a tax efficient Mutual Fund which pays monthly distributions of $1,340. These cash distributions are used to make extra monthly payments on the mortgage and are reinvested after paying the interest on the investment loan.
By integrating the Income Fund into the Tax Deductible Mortgage Plan, Jim and Lisa will acclerate their financial benefits and realize
- $143,243 in Free Tax Refunds
- Mortgage Paid 15.5 Years Sooner
- Investment Portfolio of $828,982
Jim and Lisa will need NO additional cash to achieve these financial results!
REGISTER for a FREE Seminar in your area and find out how you can benefit from TDMP!
