Happy New Year! As we ring in the New Year it is a good time to think about what resolutions we may want to achieve in 2012 for our home financing. Whether you have a mortgage currently, are planning to buy your first home, or are planning to refinance, I think all of these ideas will apply to you.

Consider your risk tolerance and think about whether a fixed rate term or a variable rate term is in your future. Perhaps a bit of both? The rate forecast is favourable to all of us borrowers so it is a good time to review whether you are in the right mortgage for your current risk appetite. If not, check out to see whether you can switch between options, like fixed vs. variable rates, and if there is any breakage cost to do so. A little bit of analysis on your own and with your banker can save you some money going forward.

I remember when accelerated payments were the new thing. Although it feels like less people talk about or use this feature to get rid of their mortgage sooner, you can still do this effectively by increasing the percentage of your mortgage payments so that the equivalent of 13 monthly payments is made by the end of the year. If increasing your payment by, say, 10% or more is doable, and then you will become mortgage-free sooner.

Another resolution may be something more simple, for instance, to change your mortgage payment frequency. I have talked to a few people who have changed jobs since they took on their mortgage and have had to do this. If you have moved to a job that pays commission or bonuses instead of a straight salary, and find you are shuffling to meet weekly or bi-weekly payments, think about moving back to monthly mortgage payments. I am not advocating this move if you don’t need to, but it may be helpful depending on your current cash flow.

Happy 2012 and think about reviewing your home financing. It is a way of taking better control of your finances for the New Year!

What are your home finance resolutions for 2012?

Mark Twynham has been with the Bank of Montreal since 1981, the last six of which as an Area Manager in the Greater Toronto Area. He currently manages a team of 27 Mortgage Specialists.