Nobody particularly enjoys having a mortgage hanging over their heads, but it’s inevitable that most of us will have to pay one off at some point in our lives. While mortgages are hardly avoidable, there are ways to way to pay them off quicker, without it feeling like you’ve burnt a substantial hole in your pocket.
It’s important to remember the disadvantages of stretching on a mortgage repayment forever- it can prevent you from being able to retire earlier, create unnecessary stress, and cause an unnecessary financial drain through extra interest. The sooner you can pay off your mortgage, the better, and there are numerous means, some more effective than others, of doing so.
Some of the easiest strategies to pay off your mortgage quicker are highlighted below:
1. Purchase a Home You Can Afford
It may seem obvious, but it’s easy to go over your head with what you can realistically afford when it comes to purchasing a home in the first place. This will only create stress and financial problems for you in the future so we recommend taking out a home loan you can afford. If you’re honest with yourself from the get-go, it will ultimately make paying off your mortgage much easier- and much more stress-free.
2. Switch Up Your Deal
You might feel comfortable in keeping to the same deal you’ve always had, or you might not want the hassle of switching over. But this could mean you’re missing out on some far better deals when it comes to paying off your mortgage. By comparing deals on remortgaging once your current mortgage rate has expired, you may be able to save money by finding one at a cheaper payable interest rate. You do need enough equity on your home for this to be a reasonable option, though.
3. Decrease Your Repayment Term
You most likely know that shortening your repayment term for your mortgage decreases the interest rate you’re expected to pay. “While it will mean higher monthly repayments, it will be worth it in the long run” says Alan Bell Mortgages. Make sure you’re comfortable with parting with more cash per month, though- if you’re not, it may be best considering overpaying instead.
4. Pay Off Other Debts
The bigger the debt, the higher the interest rate, and things can get really complicated when you’ve got other large sums of money in need of repayment alongside your mortgage. Focus on paying off these debts first, which will save you a substantial amount of cash over a long period of time, which you can then dedicate towards your mortgage.
5. Overpay in Your Monthly Payments
With this strategy, a little goes a long way. Even overpaying to your monthly payments by a meagre couple-of-hundred pounds should add up in the long-term- just think how much extra that means you’ll be paying off per year. Be realistic with yourself: if you think you’ve got cash to spare at the end of each month, it may be worth thinking practically about how you can use this to your benefit in the long run.