Mortgages often stick with us for most of our life. Paying off a house isn’t cheap, and being mortgage free sounds like a distant dream that many of us won’t get to see for many years. Thankfully, there are plenty of ways to get your mortgage paid off faster and much earlier than you may have initially thought.
1. Remortgage and look for a cheaper deal
It’s always possible to look for a different lender by remortgaging. Monthly payments could become subject to less interest if you look for a company that can offer you a better deal. If they can offer you a lower interest deal, then there’s no reason not to switch over as long as the interest you’ll be paying is lower and any fees that it can incur are also calculated.
2. Start overpaying
You can slowly work towards becoming mortgage-free by overpaying each month. This ultimately means that you pay back your mortgage faster and it also means you end up paying less because your payments are subject to less interest. You might not feel like you can overpay each month because you’re on a tight budget, but there are plenty of ways to cut down on your expenses so that you can afford to overpay your mortgage. This article from clearscore.com looks into this in further detail.
3. Let extra money contribute to your mortgage
There are times in life where we can get “extra” money. For instance, if you get an unexpected bonus or tax refund, or even win a small lottery bonus that you didn’t plan to, you could always put that money into your mortgage instead of putting it towards luxuries. It sounds really boring to put extra funds like that into your mortgage, but it’s ultimately one of the best places to invest your money so that you can be mortgage-free at an earlier point in life. You don’t have to pour all of that money into your mortgage, but using some of it will absolutely help you pay down your mortgage faster.
4. Reduce repayment term
Jason Bailey at mortgage broker lendngexpert.co.uk suggests that if you want to reduce the amount of interest that you pay (and thus pay your mortgage off faster) then it’s a good idea to reduce your repayment term. Many lenders use a standard of 25 years, but if you’re earning a good deal of money and you’re willing to repay it earlier, then you could always shorten the repayment term to get it paid off faster and with less overall money. However, you should always keep in mind what you can afford and how comfortably you can pay off your mortgage.
5. Make an extra mortgage payment
It’s also good to get into the habit of repaying one more mortgage payment per year. This will significantly speed up your mortgage repayment term although it can be quite rough on your finances. This is a good alternative to paying extra every month and achieves the same thing, albeit on a different schedule that can be either more comfortable or more difficult for you depending on your circumstances. Using a calculator will help see how much interest you can save over the period of the loan.