If you have a mortgage, you might be understandably resigned to paying off the mortgage for the full term of the loan. However, if you’ve given little thought as to how you can effectively and affordably pay off your mortgage sooner it’s time to change that now.
It can actually be easier than you might think–and happen sooner than you might imagine–to pay off your mortgage.
Why pay off your mortgage sooner?
There are a few reasons why paying a home loan off early is a good thing. Some of the benefits include:
Interest
The sooner you pay off your mortgage loan the sooner you stop paying interest. The less interest you manage to pay over the life of the loan the better.
Equity
Paying off your mortgage is the same as building equity in your home. The sooner the mortgage is paid off the faster your equity in the home increases.
Stress
A life without a mortgage can offer huge reductions in financial stress as that money can now be parceled out for other expenses.
Cash flow
Without a mortgage, your month-to-month cash flow will be better and allow for great financial flexibility.
Independence
Owning your home outright and not having to pay back the bank gives you a financial freedom and independence that is hard to really qualify in words or quantify in dollars.
Tips for Paying Off Your Home Loan
1. Refinance Loan
Getting a lower interest rate by refinancing your mortgage will help you allocate more money to paying off the principle of the loan rather than interest on top of the loan.
Make sure to speak to a broker like Loan Monster for more information regarding your refinancing options.,
2. Lender Negotiation
Banks often offer incentives to refinance or stay with them (rather than refinancing with another lender). To that end, you can sometimes negotiate the terms of your existing loans to help you pay it off sooner.
From being able to increase your fortnightly repayments to making repayments at a different frequency, over time these changes can help your mortgage be paid off sooner than you realise.
3. Maximise Repayments
Within the limits of what you are able to do, making higher and/or more frequent loan repayments will overtime help you pay off your home quicker. For some tailored strategies that suit your budget and needs, we highly recommend speaking to our team right here at Loan Monster.
4. Offset Accounts
An offset account can be a very powerful tool when paying off your mortgage. The amount of money deposited in an offset account is “off-set” against the mortgage itself bringing down the amount of money upon which you’re being charged interest. This might not seem like a lot but it can help you save more and pay down your mortgage at a significantly faster rate.
3. Creative Thinking
There are always out-of-the-box ways that you can pay off your mortgage sooner. One way is to consider renting out a spare room or unused space. The extra income can then be put directly towards your mortgage as extra repayments.
Make the right move with Loan Monster
At Loan Monster, we’re always here for our clients. We love helping our clients get ahead financially and enjoy the peace of mind and financial freedom that can be obtained through owning a home outright without a mortgage.
As a mortgage broker in Fremantle, our team works with everyone from first home buyers to seasoned investors, so whether you want to buy your very first home or want to refinance an existing mortgage to take advantage of a different and better deal, we can help.
Plus, if you’re interested in not just finding out whether you should be aiming to pay off your home loan sooner but how you can be achieving just that, we recommend you give us a call today. We’d be more than happy to talk you through all of your options.
