A mortgage is one of the biggest financial investments you’ll make in your life. It’s also one of the biggest debts you’ll ever have.

The most common mortgage amortization period in Canada is 25 years — that’s practically a third of your life. So, it comes as no surprise that many of us consider “paying off my mortgage” among our top financial goals. Wouldn’t it be great if you got some help to do just that? And even better, what if your mortgage itself was helping make it happen?

A Servus mortgage can do just that! Year after year, having your mortgage with Servus pays (in cash!), making it possible to pay down your principal faster and become mortgage-free sooner.

Get a mortgage that pays you

The idea of a mortgage earning you money seems too good to be true — but it’s not! Being a credit union (as opposed to a traditional bank) means that Servus shares its profits with member-owners every year, based on the business (products) members hold. This annual benefit is called Profit Share Rewards® cash.

How does this relate to mortgages? Well, because of their high value, mortgages earn hundreds of dollars in Profit Share Rewards cash each year. For example, if you had a $300,000 mortgage, you’d earn about $500/year in Rewards cash. You can find out exactly how much you could earn for your mortgage (and other products) with our Profit Share® calculator.

If you would like or need more cash now, you can also take advantage of our Profit Share Rewards cash advance. This extra cash can help with all extra costs that comes along with buying a home.

Illustration of a house in the front with 2 stacks of coins. The house has a ribbin going out from a window, saying Profit Share in a green Servus circle. There are 3 houses, 2 clouds, and 4 trees around the house and in the background. The graphic depicts how a Servus mortgage can help you be mortgage-free faster.

If you have an existing mortgage and the thought of moving it seems daunting, don’t worry. A Servus mortgage specialist can help you through every step of the process. And if you’re considering buying your first home, our experts can guide you through that process as well (here are 5 reasons you should consider taking the mortgage plunge to get you started).

So, after securing a mortgage that pays you annually, it’s time to talk about how to use that cash to pay it off faster.

Use Profit Share Rewards cash to pay down your principal

You’ve likely heard tips and tricks about how to pay off your mortgage faster. But short of winning the lottery, they all include finding room in your budget or taking excess funds to put towards this goal. Since a Servus mortgage pays you, there’s no need to find that extra cash — you’re already earning it in Rewards cash.

Putting your annual Profit Share Rewards cash toward paying down your mortgage debt can save you money in interest costs and shave time off your amortization. The key is leveraging it to make a yearly lump sum payment beyond your regularly occurring mortgage payments.

Here’s a breakdown that shows the savings using the example of a $300,000 mortgage at 1.94% interest on a monthly payment schedule:

25-year amortization period Years
1-5		 Years
6-10		 Years
11-15		 Years
16-20		 Years
21-25

Mortgage debt without applying Rewards cash payments

 $300,000 $250,992 $197,018 $137,573 $72,104

Mortgage debt after applying annual Rewards cash payments

 $300,000 $248,787 $193,507 $133,806 $69,322

 

And that’s how a Servus mortgage can help you achieve your goal of becoming mortgage-free faster.

Whether you have an existing mortgage elsewhere, or you haven’t committed to taking the plunge quite yet, switching or opening a new mortgage with Servus can pay off.

Talk to a mortgage professional

Originally posted on October 13, 2020.