CIBC Poll: Mortgage free by 48? Tips from Canadians who prove it's possible

Current mortgage holders believe they will carry their mortgage to age 55 on average, but with a plan and small sacrifices, they could free up years of payments to go toward retirement savings

TORONTO, April 30, 2012 /CNW/ - A CIBC (CM: TSX) (CM: NYSE) Poll conducted by Harris-Decima reveals that, on average, Canadians currently holding a mortgage believe they will be 55 years of age by the time their mortgage is paid off, leaving them with a short window of opportunity to ramp up their retirement savings in their "mortgage-free" years. However, the poll also reveals some positive news - among Canadians in the poll who have successfully paid off their mortgage, they achieved mortgage freedom by 48 years of age - a full seven years sooner than current mortgage holders anticipate.

The poll reveals the extra steps and important decisions these Canadians made to accelerate their mortgage repayment.  For example, a majority of mortgage-free respondents used one or more of the following strategies to pay down their mortgage faster:

  • 52 per cent made lump sum payments annually when they could
  • 42 per cent increased the amount of their regular mortgage payments
  • 40 per cent increased the frequency of their regular mortgage payments

"Being mortgage-free is a top financial priority for many Canadians, and this poll suggests that by having a plan, Canadians may be able to pay off their mortgage sooner than they anticipate," said Colette Delaney, Executive Vice President, Mortgage, Lending, Insurance and Deposit Products, CIBC. "Consider what you normally pay to your mortgage every month, and then imagine that dollar amount going towards your retirement savings instead. That really puts into perspective the difference paying off your mortgage even one or two years earlier can make."

However, becoming mortgage-free faster isn't easy.  To implement the strategies above, 78 per cent of Canadians who have already paid off their mortgage say they also made a number of sacrifices along the way.  The poll found Canadians who have paid-off their mortgage did one or more of the following:

  • 53 per cent said they skipped large, "unnecessary" purchases
  • 53 per cent said they created a budget to track their spending
  • 49 per cent cut down on extra spending, including restaurant and entertainment costs
  • 38 per cent skipped vacations

"A key finding in this poll is that Canadians who have successfully paid off their mortgage made some difficult choices about how best to spend their money over the course of their mortgage," adds Ms. Delaney.  "They made debt repayment their number one financial priority, skipping vacations or holding off on unnecessary purchases along the way to ensure they were on the path to achieving their long-term goal of becoming mortgage free."

There are some strategies Canadians can employ that can minimize the feeling of sacrifice. For example, using your tax refund for a lump sum payment in the Spring or increasing your mortgage payments by a modest amount at the start of each year if you receive a salary increase can help you accelerate your mortgage repayment while minimizing the impact on your overall cash flow.

In a poll released by CIBC in January 2012, Canadians identified paying down debt as their number one financial priority for the year, and Ms. Delaney notes that low mortgage rates can help Canadians accelerate their debt repayment.

Some Canadians currently paying down a mortgage, or planning to purchase a home with a mortgage may feel that as house prices have steadily increased, becoming mortgage-free sooner may seem like a difficult task today.  However, it's worth noting that some Canadians who are mortgage free today started out in the late 80's and early 90's with interest rates sometimes in the double-digits, and yet still achieved mortgage freedom in their late 40s on average.

"Your mortgage is one of the biggest financial commitments you will ever make, and investing some time up front to get advice about how your mortgage fits with your overall financial goals can yield significant financial benefits down the road," adds Ms. Delaney.  "If you review your finances and find a way to contribute a little more towards your mortgage every month, or make an extra lump sum payment, you can capitalize on today's low rates and accelerate your mortgage repayment."

Accelerating Mortgage Repayment - Mortgage Payment Calculator Example

Using CIBC's Mortgage Payment Calculator found on, the scenario below illustrates the significant difference extra steps and sacrifices can make:

Kevin and Stella, both 30, have purchased their first home and after a 20 per cent down payment, have a $330,000 mortgage which they plan to pay down over 25 years.  Since it is their first home, they have locked in a five year fixed mortgage.  Given a hypothetical interest rate of 4 per cent and assuming the rate remains steady over the duration of their amortization for illustrative purposes, we can see how Kevin and Stella's mortgage will be shortened by taking some extra steps.

If the couple makes the minimum payments of $1,779 per month, they would be mortgage free at 55 years of age.

However, given that rates may rise in the future, Kevin and Stella increase their monthly payment by $100, reducing their amortization by three years.  By following this plan, they will be mortgage free at 52 years of age and will have the opportunity to redirect three years of mortgage payments to their retirement savings.

In addition, Kevin and Stella have reviewed their monthly budget and have decided to cut back on some of their restaurant and entertainment costs.  In doing so, they have an additional $2,000 annually they can contribute in a lump sum payment towards their mortgage.  This step further reduces Kevin and Stella's amortization so that they will be 49 years of age when they make their last mortgage payment.

By making some sacrifices and following a plan, Kevin and Stella can be mortgage free in 19 years by age 49.

Special Mortgage Offers from CIBC

Taking broader financial needs into account, CIBC has developed mortgage offers aimed at helping Canadians reach their financial goals, including paying down their mortgage faster. In addition to competitive mortgage rates, CIBC also has offers to help Canadians reevaluate their current mortgage even if it's not yet up for renewal.

  • For example, the CIBC Mortgage Switch Offer combines a great mortgage rate with 2% cash back up front.  The cash back can be used to help offset prepayment charges clients might incur when transferring their current mortgage at another financial institution before their renewal date to take advantage of a lower rate.  The cash back can also be used to make a payment at the beginning of your mortgage when interest costs are at their highest.

  • Canadians looking to build their savings while paying down their mortgage may find the CIBC Wealth Builder option for mortgages makes sense for them.  This offer combines a competitive mortgage rate on a 5-year fixed or variable mortgage with regular cash back payments made to a CIBC savings account to help Canadians build a regular savings plan while paying down their mortgage. The cash back can also be used to make lump sum payments toward your mortgage.

Given the number of mortgage options available to Canadians, it's important to sit down with an advisor who can help review your overall financial picture to ensure you choose the mortgage and plan that best meets your needs. In addition to Advisors at CIBC branches, CIBC's Mobile Mortgage Advisors make it easier than ever to get mortgage advice anytime, anywhere by meeting Canadians at a time and place that works for them.


Among Canadians who have paid-off their mortgage, the average age at which Canadians made their last payment, by region:

National Average - Age 48
BC - Age 51
Alberta - Age 50
Man/Sask - Age 45
Ontario - Age 47
Quebec - Age 50
Atlantic Canada - Age 47

Among Canadians who currently hold a mortgage or are planning to purchase a home with a mortgage, the average age at which they expect to be mortgage free, by region:

National Average - Age 55
BC - Age 58
Alberta - Age 53
Man/Sask - Age 52
Ontario - Age 53
Quebec - Age 59
Atlantic Canada - Age 53

Each week, Harris/Decima interviews just over 1000 Canadians through teleVox, the company's national telephone omnibus survey. These data were gathered in a sample of 1001 Canadians between March 29, 2012 and April 2, 2012. A sample of this size has a margin of error of +/-3.1%, 19 times out of 20. The margin of error for the subset of 278 Canadians who have paid-off their mortgage is +/-5.9%, 19 times out of 20, while the margin of error while for the subset of 370 Canadians who currently hold a mortgage or are planning to purchase a home with a mortgage is +/-5.1%, 19 times out of 20.

CIBC is a leading North American financial institution with nearly 11 million personal banking and business clients. CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, and has offices in the United States and around the world. You can find other news releases and information about CIBC in our Press Centre on our corporate website at


For further information:

Sean Hamilton, Director, Media Relations: (416) 304-8456 or

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