How to pay off your mortgage quicker?

August 26, 2019
Jess

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If you have bought your own home, chances are you did so through a home loan. While a home loan can help you reach goals that would be out of reach, it also leaves a nasty taste in our mouths as well as a noticeable dent in our income. Many people choose not to say that ugly, despised word “mortgage,” but I think it important to discuss. While paying off a mortgage can seem like a life sentence, there are clever ways of breaking the bondage sooner than listed on your home loan paperwork. To pay your mortgage off quicker, you need to ask yourself some hard questions, as well as adjust your priorities.

Are you with the right lender?

The best home loans are fair, economical, and offer you great features. Unfortunately, you may not be with the best lender and not even know it. Choosing a home loan can be tricky, but it’s important to find one that suits your needs, not the other way around. While many people will shop around for lower interest rates, this should not be your sole deciding factor.

Some lenders may offer an attractive rate, but lack other features like an offset account, or early repayments. The market is extremely competitive, and it’s straightforward to refinance your loan and change lenders. If you decide that your lender is not the best value for you, it’s advisable to steer clear of the big banks. Smaller lenders offer competitive home loan packages with the added benefits of personalized service and care, something you can’t put a price on. It’s worth your time to do an annual check-up on your home loan and make sure it’s still doing the most it can for you.

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Make some small lifestyle changes.

Changing over to a different lender can have a dramatic effect on your repayments, but the simple fact is you will still be making repayments on a large loan. So how do we reduce this debt quicker and own our home faster? Through some small changes in your spending, you may be able to pay your mortgage off at a faster rate. The most important part of this plan is to prioritize your home loan.

Hopefully, you drafted up a budget before you took the plunge into homeownership. If you didn’t, not worry, now is a perfect time to write up a budget. Having a clear picture of your finances can help you identify unnecessary expenses that would be better spent repaying your mortgage. Be honest when evaluating your finances; there’s no point trying to fool yourself.

Making extra repayments is a sure-fire way of speeding up the repayment process. Keeping your payments steady and consistent is also a very wise idea, as interest rates fluctuate, you would do well to keep paying higher rates on your repayments even if you don’t necessarily have to. Good old fashioned scrimping and scrounging is a very effective way of freeing up money to put towards your mortgage. This lifestyle is not for everybody, but it can pay to adopt some elements of this frugal way of living.

Paying off your mortgage faster does not necessarily mean you will have to abandon your comfortable way of life. Finding the right lender, make sure your home loan is working for you, and considering perks and breaks like an offset account are smart ways of making your money go further. Setting up a budget, prioritizing your loan and diverting spare funds into repayments will have you owning your own home faster than you think.

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