The faster that you pay your mortgage off, the sooner you'll have excess money to save into your own bank account or to spend on the things you love.
HOW TO PAY OFF YOUR MORTGAGE FASTER
Paying off a mortgage usually takes people 25-30 years to do, however there are some things you can do to reduce this amount of time. Below are some tips below on what you can do to pay off your mortgage quicker.
find the right home loan
Find the right loan for your circumstances. Whether you need a loan with a low interest rate, an offset account or a bridging loan, a mortgage broker can help you find the right loan for your needs. They can look into the best options for your needs and save you the hassle of doing this yourself. And you don't even need to pay them!
Don't be afraid to re-finance your loan if you find one with a lower interest rate. Sometimes you could start off with a bridging loan with a high interest rate and after you've sold your property and are living in the new one, you could re-finance your loan to another loan with a much lower interest rate.
PAY OFF THE PRINCIPAL AND INTEREST
The quickest way to pay your mortgage off sooner is to make sure that your loan is set up to pay both the principal and the interest. If you are just paying the interest on a loan, you will never pay off the whole debt. Paying interest only may be your only option in your current circumstance, however I would suggest not doing this for more than a year.
PAY OFF MORE THAN THE MINIMUM REPAYMENTS
If you want to reduce your mortgage bit by bit, but still managing to save years off your loan, always pay off more than the minimum amount. If your loan repayments are $450 per week, try paying $500 a week off to shave of years of your loan.
MAKE MORE FREQUENT PAYMENTS
Pay your loan off weekly instead of fortnightly or monthly. Your interest is calculated daily, so if you pay your mortgage weekly, the amount of interest that you pay will be significantly reduced than if you were to pay monthly.
EXTRA LUMP SUM REPAYMENTS
If you have a windfall, a tax return or redundancy package, make sure you put the lump sum onto your mortgage. Interest is calculated daily so the less you owe, the less you'll pay in the long run.
I hope this has helped you to come up with some ideas on how to repay your mortgage quicker. If you would like to talk to a mortgage broker, contact me on 0414 520 853 and I can put you in touch with someone who can help you to reduce your loan.