Everyone wants to pay off the mortgage as soon as possible but many missed in identifying ways to it.
Before we move on, here is a simple question for you. When was the last time did you check the progress of your mortgage payment?
Remember even simple analysis of your mortgage payments can bring savings, opportunities like faster payment or even new investments options.
So here are out top tips to pay off the mortgage faster and move towards financial independence.
Smaller Payments But With High Frequency:
Consider cutting of the size of payment but make the payments more often. If you are paying monthly, consider changing to fortnightly repayments. This will help you to pay off your mortgage faster but pay less interest overall.
Let’s say for example if your mortgage payments equate to $2400 a month. Now cut this in half and pay $1200 each fortnight. So you will get more manageable payments to make. And by the end of the year, you will pay off $31,200 rather than $28,800.
Scale-up Your Repayment Little Bit Extra:
Try to make your repayments higher than minimum amount or a little more. By rounding up to a full number or putting an extra $100 or even $10 can have a significant difference. Some smart ways could be contributing all bonuses, tax returns and gifts into your mortgage.
If Interest Rate Falls, then Don’t Decrease Repayments:
Even if your mortgage interest rates and fees decrease, it doesn’t mean that’s all you have to pay. Keeping the repayments at the same level when interest rates are lower, will pay off more of the principal with each payment and make it speedy to pay- off your loan.
Use a mortgage offset account if possible as it is linked to your loan. The monthly interest payable is calculated by deducting what is in your offset account from your current loan.
For instances, if your mortgage is $700,000 and your offset account has $20,000 in it, you will only pay interest on the remaining $680,000.
This trick of offset account can save interest while still giving you access to your savings.
Look For Better Deal:
Over the period of time our circumstances change, so is our need and this is very much true for any mortgage. If you think your circumstance has changed and your current mortgage is no longer suitable for your situation then this is the right time to speak to a finance broker. Take help to find the suitable product for your which may bring better rates.
But importantly, have a look onto your lender’s condition (if any) to charge fees for extra repayments, refinancing, or any other steps attempting to save on your loan. Your finance broker will be able to provide details.
Get our Free Loan Health Check to understand your current standing and how to be better off in your mortgage.