At Super-Advice we are about all things financial, but more importantly, helping people understand so they can get ahead financially.
Today we will explore practical strategies that can help you accelerate your mortgage repayment journey. Let’s dive in!
Increase Your Repayment Amount
It might seem really obvious but a lot of you aren’t doing it, so I’m gonna say it. Increase your repayment amount even by a little bit.
One of the most effective ways to pay off your mortgage faster is by increasing your repayment amount. Even a small increase can make a significant impact over time. Consider allocating any additional income, such as bonuses, if you get any tax refund or if you’re lucky enough to win lotto – put it towards your mortgage.
Additionally, explore the possibility of making either fortnightly or bi-weekly payments instead of monthly as this results in an extra payment each year.
Make Lump-Sum Payments
Another obvious one, but if you can make some lump sum payments.
Whenever you come into a lump sum of money, I don’t know if you’re lucky enough to ever see a work bonus or receive an inheritance, consider using a portion of it to make a lump sum payment towards your mortgage. These additional payments can help reduce the principal amount,and decrease the overall interest you’ll pay over the life of the loan.
Refinance to a Lower Interest Rate
Review your mortgage.
Have a look at it periodically, and determine if refinancing to a lower interest rate is a viable option for you. Obviously, lowering your interest rate can lead to substantial savings off the loan term.
Explore different lenders.
Consult with a mortgage broker. Now we’ve got one – Megan Wilton. Give her a call. She helps us and she’s a legend. Megin will find the best refinancing opportunities that align with your financial goals. Now remember, if you haven’t got any financial goals, come and never talk to us. We can help you see if we can put some in place.
Utilise an offset account
Consider setting up an offset account. And if you don’t know what this is, it’s like this. If you owe this much money, you’re gonna pay interest on this much money. If you’ve got a hundred thousand dollars sitting over here in an offset account, what they essentially do is pretend to add it to the mortgage so your debt decreases by a hundred K, and you’re only paying interest on the remainder.
Have a chat to Megan Wilton if you want some more information or you wanna look and see if that’s an option for you.
Review your spending habits
Do the budget. Take a close look at your spending habits and identify areas where you can cut back. By reducing your discretionary spending and allocating those savings towards the mortgage, you’re paying it off faster. Time has a big impact on a mortgage, so you get it down faster, you save so much money.
Evaluate your lifestyle choices, like how often are you going out for dinner, how much money you’re spending on entertainment, and find some ways to really tighten up and become more frugal. And, make sure you do not sacrifice happiness. You only get one life.
Consider mortgage repayment options
Some lenders offer prepayment options that’ll allow you to make extra repayments without incurring penalties. Explore if your mortgage offers these facilities and take advantage of them by making additional payments wherever possible. Just like I’ve been saying right through this clip, you can make significant strides towards paying off your mortgage way faster.
That’s a wrap
In conclusion, I think it’s pretty obvious the more money you can allocate towards your mortgage, and we’ve given you some ideas on how to do that, the faster it will go. Now remember your mortgage, you borrow this much money and they charge you the interest. The longer it takes you to pay down that big lump of money that you borrowed, interest payments are gonna be there as well
So the faster you can get rid of it. The less interest you have to pay, which means the less you pay overall. Hope that’s helpful.
If you need any financial help or advice please get in touch with us at Super-Advice.