If you have a 30 year mortgage on your home but you want to pay it off quicker, there are ways that can help you be mortgage free faster-even small steps over time can make a big impact.
There are two parts to each mortgage repayment of the principal and the interest. The principal is the remaining balance of what you originally borrowed, while the interest rate is what you’re charged while that principal is outstanding. You may be looking to pay as much as you can toward the principal to reduce the amount of interest you’ll pay over the life of your mortgage.
We’ll walk you through what you need to know to start paying off your mortgage faster.
Keep in mind, it’s important to understand the terms of your mortgage agreement before making any changes to your payments. Your mortgage may come with certain prepayment privileges. At stage of your home loan terms, we are committed to support our clients to pay off your mortgage faster should they wish to do so.
If you have a 30-year mortgage on your home but you want to pay it off quicker, there are ways that can help you be mortgage free faster-even small steps over time can make a big impact.
There are two parts to each mortgage, repayment of the principal and the interest. The principal is the remaining balance of what you originally borrowed, while the interest rate is what you’re charged while that principal is outstanding. You may be looking to pay as much as you can toward the principal to reduce the amount of interest you’ll pay over the life of your mortgage.
We’ll walk you through what you need to know to start paying off your mortgage faster.
Keep in mind, it’s important to understand the terms of your mortgage agreement before making any changes to your payments. Your mortgage may come with certain prepayment privileges. At the stage of your home loan terms, we are committed to supporting our clients to pay off your mortgage faster should they wish to do so
1- PAY MORE
By adding another two-thirds above your minimum mortgage repayments, you could shave 15 years off your mortgage.
2- HAVE AN OFFSET ACCOUNT REDRAW FACILITY
Any spare money you transfer into your offset account or redraw account reduces the balance used to calculate interest. The more money in the offset account, the less interest is payable.
3- REFINANCE
Refinance your mortgage to a lower interest rate but keep the amount on your monthly repayments the same. This can shave years off your mortgage term.
4- REVIEW & HOME LOAN HEALTH CHECK
Never set and forget your home loan. In a tight market, lenders will compete for your business, so take some time every year to do a home loan health check and see what offers are out there.
5- SWITCH TO FORTNIGHTLY REPAYMENT
By paying half the monthly mortgage repayment amount every two weeks, you’ll make the equivalent of an extra month’s repayment each year (as each year has 26 fortnight’s).
The content on this site is for informational and educational purposes only and is not intended as a substitute for professional credit advice. Always consult with a licensed financial advisor/finance & mortgage professional before making any decisions based on the information you read on this blog.