Another money saving idea, based on using credit cards to earn money, is to again take advantage of all those low/no rate balance transfer offers that credit card companies send out to maximize interest savings on mortgages.

What You’ll Need

With this approach, you would take out a Home Equity Line of Credit (HELOC) on your property, ideally finding one where the lender pays the legal costs for you (usually around $400). HELOCs can be found at major banks such as BMO and Scotiabank. You then wait for the next low/no rate offer to show up in your mail and you kick your plan into action.

Here are some current offers for low/no rate offers:

• Citi Mastercard - 0% for 12 months (no annual fee, 1% transaction fee)
• PC Financial Mastercard - 1.97% on balance transfers for 6 months
• RBC Visa Platinum Card - 1.97% for 9 months (no annual fee)

How It’s Done

First, you use the HELOC to make a lump sum extra payment on your mortgage, equivalent to the amount of your credit limit on your offering credit card. You then do the balance transfer, paying off the HELOC with the credit card offer. When the promo rate is coming to its end, you would start hunting around again for another offer and do it all over again! If you ever hit a dry spell with no offers, you have the HELOC to fall back on, simply transferring the balance there temporarily until you find the next deal.

The Savings for Your Diligent Work?

Let’s say your mortgage rate is currently 5.5% and you get an offer of 1.9% for 8 months. Your credit limit is $15k. You’ll save $360 over that 8 month period. Do that a few times and I think it’s certainly worth the hassle! As long as you can always keep that balance at a rate below your mortgage rate, you are ahead of the game.

See Canada Mortgages for up to date mortgage rates. Alternatively, you can go see a mortgage broker.

Things to Watch For

• Track carefully – like credit card arbitrage, you need to track this carefully to ensure you follow the rules and keep your low/no rate throughout the whole promo.

• HELOC – make sure you won’t actually need the credit room you’re playing with for this strategy.