Five tips to pay off your mortgage faster
You bought your new property, settled in and started paying off your mortgage. But having a mortgage hanging over your head over time can be daunting. So when the reality of having a mortgage hits, don’t panic, there are plenty of ways to reduce it quickly. The right home loan doesn’t have to feel like a burden for the next thirty years - you can get started today on clearing your mortgage quicker.
Pay extra, more often
It might be tempting to make the bare minimum payments, but adding just a little extra to your payment each month will make a big difference long term. So will changing the frequency of your payments. Even a small increase like $50 each month, or paying fortnightly instead of monthly will shave money and time off your mortgage. If you find yourself with loose change, consider making an extra payment.
Consolidate your debt
It’s a good idea to roll anything that has a high interest rate into one loan. You can reduce the amount of interest you pay and use this extra money to pay off your home loan faster. Combining debts into one loan can also make repayments much more manageable and affordable for you.
Cut the costs
Many home loans have features that you might not even use. Review your loan, or have a mortgage broker conduct a review for you, to work out if you have any features that you just don’t need. Many features can cost extra, so cut your costs and cut redundant features from your home loan.
Reduce your spending
Do you have a budget? A budget will help you work out where your expenditure is going and identify where you can make some savings. A budget will help you be more accountable with your spending, and you can use the extra cash you free up to put back into your home loan. Every extra dollar helps in reducing the costs and length of your loan.
Regular Home Loan Review
Your circumstances and situation will most probably change over time. The loan you started your property journey with might not be as relevant for you anymore. Interest rates change, but so do the products and features on the market. A regular review of your loan will make sure your loan is always working for you.