What will you do with your Tax Refund?
The deadline for filing your taxes is looming and at River City Financial we know that you are probably counting on the extra money. The average Canadian Tax Refund is about $1600, so instead of going out and blowing it all on a new spring wardrobe, we want you to consider putting your money to better use in your savings or investments.
Want to know how to save even more money?
If you own your home and you have a mortgage an excellent use of these funds would be to place a lump sum on your mortgage. At River City Financial, we advise our clients of this practice so that they can save thousands of dollars in interest over the life of their mortgage.
Mortgage Amount $300,000
Mortgage Interest Rate 3.25%
Approx. Interest Savings Over 25 years $1,860
These savings may seem trivial to some if looked at as a onetime event, however if our client was to continue this strategy on a yearly basis they could save more than $17,000 in interest over the life of their mortgage. This strategy alone can help our clients in Edmonton become mortgage free almost 5 years faster.
What if you were to combine this with an accelerated biweekly payment stategy? Thousands of dollars would be saved and could ensure that you become free of your mortgage even faster!
Don’t have a mortgage? You can still use your Tax Refund as an opportunity to invest in your future or pay off your current debt. Many people put the money back into their TFSA, RRSP or another means of saving rather than thinking of the money as ‘walk around the town’ money. We hope you do the same this year!
Have questions about putting down a lump sum payment on your mortgage? Don’t hesitate to ask us! Leave a comment below or call us at (587) 409-2944.
**Note: The above calculations are based off of a 25 year amortization; a higher interest rate would increase the savings.**