6 How to Get Financial Freedom and Pay Off Your Mortgage More Quickly
Interest rates on mortgages have never been lower, and they can only go up from here. Even though the majority of economists predict that interest rates will rise in the coming months, the chance to pay off your mortgage sooner (and save tens of thousands of dollars in the process) should be too good to pass up.
You say it’s a great idea, but after paying your monthly bills, you are almost out of money before your next paycheck. Here are some helpful hints to help you fulfill your desire to own a home sooner (and perhaps even fund your subsequent real estate purchase)!
Regular Extra Payments
Make sporadic, small additional payments. Everything adds up; if you can shave off even $100 from your paycheck each month, you can apply it to your mortgage to accelerate repayment.
Higher Repayments
Set your monthly mortgage payment higher than the minimum amount mandated by your bank. If you’ve had a variable mortgage for a while, you’ll notice that your payments have decreased significantly. You would have finished paying off your debt by now (and it’s better late than never) if you had continued making payments at the same rate as two years ago!
Use Lump Sums Wisely
Put those sporadic lump sum payments toward your mortgage. You can shorten the length of your loan and save a ton of money on interest when you receive a tax refund, a work bonus, or even a small inheritance.
A Home Loan Offset Account Is a Must
Make sure an offset account is set up. There is no better place for interest to go than into your mortgage because of the thousands of dollars you could save by paying off your loan earlier.
Do It Fortnightly
The safest and most efficient way to pay off a mortgage is to switch from monthly to biweekly payments. By paying biweekly, you effectively make 13 monthly payments over the course of a year, giving you a month’s extra repayment each year.
Review Your Loan With a Mortgage Broker
Consult a mortgage broker. What was the best loan for you when you first purchased your home might not be the best loan for you right now. The relevance of your mortgage can be affected by a number of factors, such as your desire to split your loan or set a fixed rate, as well as your recent decision to live on one income due to the birth of a child or a job change that has increased your earning potential. The options available to you can be explored by your mortgage broker.
Work Out a Strategy – Now
It is best to start paying down your mortgage as soon as possible because this is the most affordable time to start living the financial freedom you have always wanted.
