GST Holiday and $250 Cheque: What They Mean for You and Your Mortgage
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The federal government is stepping in with some temporary relief this holiday season: a “GST holiday” on everyday items and a $250 cheque for many Canadians. If you’re a homeowner—or thinking of becoming one—here’s how these changes might impact your wallet and even your mortgage.
What is the GST Holiday?
From December 14, 2024, to February 15, 2025, the government is suspending the GST/HST on several essentials. This includes groceries, kids’ clothing, diapers, dining out, Christmas trees, and even wine and beer.
Here’s an example of how you might save:
• Weekly grocery bill: $250
• Dining out: $100
• Gifts and holiday shopping: $400
Without the GST holiday, you’d pay about $38 in taxes on this $750 spending spree. Thanks to the tax break, that’s $38 you can redirect toward other priorities, like managing your mortgage payments.
The $250 Cheque: A Mortgage Perspective
If you earned under $150,000 in 2023, you’ll also get a $250 cheque in April 2025. While that might feel like a small windfall, it could have a bigger impact than you think when you apply it to your mortgage.
Let’s break it down with an example:
• Suppose you have a $400,000 mortgage at a 5% interest rate with a 25-year amortization. Your monthly payment is around $2,326.
• Applying the $250 cheque directly to your mortgage as a one-time prepayment saves you $590 in interest over the life of your loan.
It might not seem like much, but small, consistent prepayments can snowball into significant savings.
Why Does This Matter?
The GST holiday and cheque are aimed at easing financial pressure, but they can also help you stay ahead on your mortgage. With inflation and interest rates impacting household budgets, finding creative ways to redirect these savings toward debt can make a big difference in the long run.
What Should You Do with Your Cheque?
If you’re wondering how to make the most of that $250, consider these options:
1. Apply it to Your Mortgage: Even a small prepayment chips away at your principal and reduces interest costs.
2. Build an Emergency Fund: If you don’t have 3–6 months of expenses saved, consider setting this money aside for unexpected costs.
3. Tackle High-Interest Debt: If you have credit card debt, the cheque could save you more in interest here than on your mortgage.
4. Invest in Your Home: Use it to cover minor upgrades or maintenance that could improve your property’s value.
Bottom Line
This holiday season, the GST break and $250 cheque might not feel like game-changers, but they’re opportunities to give yourself a little financial breathing room—or even get ahead on your mortgage.
By thinking strategically and applying these savings wisely, you can set yourself up for greater financial stability in the year ahead.
If You’re Looking For More Help
Wondering how you can put your GST rebate cheque to work toward your financial goals? Whether it’s paying down your mortgage or exploring other options, I’m here to help you make the most of this opportunity. Let’s chat about how you can use this extra boost to get ahead on your homeownership journey! Use this link or simply call us at +1 (647) 554-2718.
Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always consult with your mortgage professional or financial advisor for personalized guidance.
