TaxTips.ca - Pay down non-tax-deductible debt quickly!

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Financial Planning -> Save Money -> Pay down your debt!

Pay down non- tax-deductible debt (with over 8% interest) as quickly as possible.

Try one of the loan calculators on the Calculators page, to see how much interest you can save by paying down your debt more quickly!

We will assume:

	You have a $100,000 mortgage.
	The interest is not tax deductible.
	Your interest rate is 7.5%.

Your monthly payment amount and the total interest paid will vary greatly depending on how long you take to pay off your mortgage.

The following table shows that you can save almost $80,000 by paying off a $100,000 mortgage over 10 years instead of 25 years:

Mortgage Term (years)	Monthly Mortgage Payment @7.5% Interest	Total Mortgage Payments	Total Interest Paid	Amount Saved Using Shorter Term
25	$ 739	$ 221,697	$ 121,697	$ 0
20	$ 806	$ 193,342	$ 93,342	$ 28,355
15	$ 927	$ 166,862	$ 66,862	$ 54,835
10	$ 1,187	$ 142,442	$ 42,442	$ 79,255

Tax tip: Pay down all non-tax-deductible debt with over 8% interest, then see our Save and Invest page.

Revised: September 06, 2009

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