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Pay Off Your Mortgage Faster

Updated on September 18, 2014

How Do I Repay My Mortgage Sooner

How do I repay my mortgage sooner is a question that a lot of people ask but how do you repay your mortgage sooner. Well is easier than you think,

In this lens, I am going totell you the secrets to pay down mortgage faster that most lenders will not tell you because of course they want you to have the mortgage as long as possible so they earn lots of money from you and do not have to go and find someone else to loan their money to.

Some are easy to do, others are harder but even using one of these ways will save you money and show you how to repay my mortgage sooner

Tip 2: Reduce the term you take out the loan

Repay My Mortgage Sooner

Taking out your mortgage for a longer term this means your repayment will be lower but if you can afford the higher repayment it can be a good idea to drop the mortgage period to a shorter term is another way, how to pay down mortgage faster. Compare a 15 year mortgage to a 20 year mortgage to a 30 year mortgage and you will find that the amount of interest you save will be worth the higher repayment.

Tip 1 : Increasing your down payment

Repay My Mortgage Sooner

The first tip in how to pay down mortgage faster is increasing your down payment (house deposit) to as much as you can afford means that you will be able take out a smaller mortgage. This means you will not be paying interest on the money you did not borrow.

You should aim to have at least a 20 percent deposit for your house. Banks are more likely to give you better terms for the mortgage you take out

mortgae free sooner
mortgae free sooner

Some mortgages permit you to pay more than you have to. This additional sum of money comes directly off the principal of the loan reducing the amount of interest you pay. Even a small amount means you will pay a lot less interest over the term of the mortgage

Just check with that your lender allows you to reduce your payment to the previous payment if it becomes too big a incumbrance or your conditions alter.

Tip 4: Schedule an annual mortgage health check

Repay My Mortgage Sooner

Mortgages are not all the same - Mortgage products available these days differ from mortgage lender to mortgage lender, each one possess there own benefits, fees, and features .

Reexamine your loans at the least yearly to inspect the total of fees and interest that you are paying up, to make certain you are receiving the best from your mortgage. Checking your mortgage yearly is how to pay down mortgage faster.

Buyer's Guide: Mortgages

You may know the difference between a fixed and tracker rate mortgage but do you know how offset deals work? The choice of mortgages can be bewildering, This Buyer's Guide may help.

Tip 5: Make more mortgage payments

Repay My Mortgage Sooner

If your monthly repayment is $1000 and you get paid twice a month why not make two payments of $500 into your mortgage account. You are not paying any more money each month but because of this early payment you have $500 sitting in your mortgage not incurring interest for half the month. This works if you are paid weekly or any other pay period less than a month.

Instead of monthly repayments, why not pay weekly or fortnightly (bi-weekly). If your monthly repayments are $1000 you would make 12 payments making a total of $12000 a year but if you paid $500 a fortnight you would make 26 payments making total repayments of $13000 or one extra repayment a year.

if you maintain your original payment if the interest rate drops you could take fewer years to pay your mortgage and save thousands of dollars in interest. Even better would be to maintain your original payment and increase it also.

The Interest rate will go back up at some stage so why you are paying less interest get as much paid off the principal of the mortgage so you will be paying less interest when they do go back up." />

How to pay down mortgage faster
How to pay down mortgage faster

Tip 7: Round your payments up

Repay My Mortgage Sooner

By adding even a samll amount of say, $10 per payment, the total of interest that you save will be incredible, and the extra cash will be comparatively painless to give up.

how to pay down mortgage faster
how to pay down mortgage faster

Tip 8: Raise payments in line with increased income

Repay My Mortgage Sooner

If your income increases, do not leave your mortgage payments as is. Whilst the disposable income might be fun to expend on unneeded lavishnesses in the short-run, the long-run benefits of living mortgage free sooner and saving those interest payments far overbalance the short-run cutting back - just make believe that you did not get a raise and maintain your usual life style. Small things like this is how to pay down mortgage faster

Tip 9: Pay a lump sum whenever possible

Repay My Mortgage Sooner

Paying greater sums of money into your mortgage could cut back the duration of your loan greatly, and provide a substantial saving of the interest. So if you have unexpected income - such as a a cash Christmas gift or tax return or bonus - look at dumping at the least one-half of the income into your loan or offset account.

You will not simply save thousands and thousands of dollars of interest across the course of your mortgage, but when you pay it directly your mortgage, you will in addition be ahead on your loan repayments.

Tip 10: Take advantage of the competition

Repay My Mortgage Sooner

The days when someone had to cower to their bank manager so that they could get a mortgage have long ago gone. Banks and other loaners are today really keen to sign on mortgage purchasers and they via ferociously for your business. You are able to make the best of this rivalry. Keep a eye on the mortgage rates and, when you discover somebody providing a significantly improved offer, you should enquire about your current lender being able to match it. If they will not, think about changing.

You might discover that just finding a more beneficial alternative will pressure your current lender to come to the party. Prior to you switching, give them a final chance!

One inexpensive way to maintain your mortgage competitive is to make use of any new alternatives proposed by your current lender.

How To Pay Off Mortgage Faster

Repay My Mortgage Sooner

This how to pay off mortgage faster lens has shown only a few ways that you can pay down mortgagefaste and save thousands of dollars in interest but remember it is a slow process but if you keep at it you will soon pay off mortgage faster so that you see your mortgage getting smaller until you are mortgage free and remember

DON'T WASTE YOUR HARD-EARNED MONEY ON INTEREST!

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    • frugalfinance lm profile image

      frugalfinance lm 5 years ago

      Some great tips and a great read!