As if mortgages aren’t confusing enough, try understanding your mortgage mail from your lender and the City.
Each year, in January and February, you receive two important pieces of mail from your bank and the City:
- Annual Mortgage Statement
- Property Assessment Notice
It’s important to understand what you’re looking at and what it means to you. Let’s start with your annual mortgage statement.
Annual Mortgage Statement
Your statement should be available to you by the beginning of February each year. If it is not sent to you in the mail – old school snail mail – it will be made available to you online. If you’re not sure where to access your statement online, contact your lender.
Your annual mortgage statement has a few important pieces of information:
- Maturity Date: put this date in your calendar so that six months prior to maturity, you’re already thinking about and doing your research for your renewal
- Mortgage Balance: stay focused on the target – being mortgage free faster! While you always want to pay off high interest debt first, even small things can affect how quickly you can be mortgage free:
- my husband and I made an agreement when we bought our house that any “found money” (ie. tax returns, bonuses etc.) would be split three ways: one third to investments; one third fun money (vacation etc.), and; one third to pay off high interest debt, if there was any, or pay down our mortgage. This way we got to have our cake and eat it too!
- when you get a raise, increase your mortgage payment
- accelerate your payments – this means that you’re making one extra monthly payment per year, but you’re dividing it among your regular payments (ie. divided by 26 for bi-weekly payments, or 24 for semi-monthly payments)
- Mortgage Term: if it’s been years since you bought or last renewed, you can easily forget whether you ended up in a fixed term or a variable term. If you’re in a variable term, your statement can be a good reminder to keep an eye on Prime rate and what the Bank of Canada and analysts are saying about rates. It might be time to lock in.
- Mortgage Rate: rates are currently on the rise, but if that changes, and rates decrease again, you need to know what your current interest rate is and discuss with your Mortgage Broker whether it would be a good idea to renegotiate a lower rate
By ensuring you review your mortgage statement every year, you stay focused on your goal of paying it off, with the least amount of interest possible. Just like investments shouldn’t be a “fire and forget”, neither should your mortgage.
Property Assessment Notice
You receive two key pieces of mail from the City each year:
- Property Assessment Notice – January
- Property Tax Bill – May
Property assessment notices are mailed in January to all property owners, both residential and non-residential. You can find the assessed value of your property or any other Calgary property online using Assessment Search.
According to the City’s website, “Your property assessment notice sent in January is based on your property’s market value, the amount it likely would have sold for last July 1st, and improvements to its physical condition as of December 31.
“Assessors look at many factors including your property’s details such as age, location, lot size, additions or renovations and sales of similar properties in the neighbourhood in the last three years.”
Remember, the lower the assessed value, the less property taxes you have to pay. If you think the assessed value is too high, you can contact your City assessor during the Customer Review Period from Jan. 4 to March 12, 2018. Your assessor may be able to resolve your concerns without the need to file a formal complaint.
If you still don’t agree with the assessment you can still put in a formal complaint prior to March 12, 2018.
The Property Tax Bill you receive in May will be based on the final assessed value from the City. The City then uses the mill rate to ensure you’re paying the appropriate amount of tax for the value of your home (ie. mill rate x value).
If you are paying through TIPP (ie. monthly, directly to the City), the Property Tax Bill will outline your monthly payments. If you pay yearly, the full amount of the your tax bill is due on June 30, 2018.
Is the Assessed Value Accurate?
The long of the short of it is no, not if you’re looking to buy or sell the home. That’s why you want the assessed value to be as low as possible; keeps your property tax payments low!
First, the assessed value is based on the amount your property likely would have sold for last July 1st, and improvements to its physical condition as of December 31. Markets change, so do values. This is now old news!
Second, if your property is in an area with a great deal of variance in the homes (ie. older homes with character homes from the early 1900s and infills worth $1.5M) potentially there aren’t a lot of homes to compare with and harder to determine the actual value.
The best way to determine your home’s value, for the purposes of selling, is to contact a Realtor and have them do a CMA (Comparative Market Analysis).
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