BMO Financial Group

BMO Financial Group
BMO Bank of Montreal

BMO Bank of Montreal

November 16, 2011 13:13 ET

Financial Literacy Month-BMO's Tip of the Day: Pay an Extra Five Per Cent on Your Mortgage Every Year and Reduce Interest Costs

TORONTO, ONTARIO--(Marketwire - Nov. 16, 2011) - To mark Financial Literacy Month, which was launched by Finance Minister Jim Flaherty, BMO Bank of Montreal is releasing a series of financial tips throughout November. As part of Making Money Make Sense and BMO SmartSteps, the tips are designed to help individuals and families save and manage their day to day finances more effectively.

BMO's Tip of the Day: Pay an extra five per cent on your mortgage every year to reduce interest costs.

  • For example, paying an extra five per cent every year will save you over $185,000 in interest over the life of your mortgage (based on a $250,000, 5 year fixed term mortgage at an interest rate of 6 per cent, with 30 year amortization).

"Adding an extra payment of five per cent of your mortgage annually will help you become debt-free sooner," said Katie Archdekin, head of Mortgage Products, BMO Bank of Montreal. "By paying an extra lump sum every year you'll pay your mortgage down faster, saving you interest costs over the long term."

BMO Financial Literacy Month Tips

November 1: Pay more than the minimum payment on a credit card balance.

November 2: Choose a shorter amortization for your mortgage.

November 3: Contribute to a child's Registered Education Savings Plan (RESP) as early as possible.

November 4: Invest in a Tax-Free Savings Account (TFSA) to maximize your savings.

November 7: Switch to weekly mortgage payments to save interest and become debt-free faster.

November 8: Take advantage of credit card travel insurance to lower costs.

November 9: Start early and contribute often to your investment account, rather than waiting to invest.

November 10: Use a line of credit to consolidate high-interest debt and save on interest costs.

November 14: Canadians can give the gift of securities and benefit at tax time.

November 15: Students, pay off your credit card balances and take advantage of student discounts to save money.

For more on financial literacy, BMO encourages Canadians to visit and

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