How To Pay Off Your Mortgage Faster
For many of us, being mortgage free is something that we can only dream of, and at times it can feel impossible. Although it may be much easier to pay off your mortgage than you think and it can save you thousands of pounds in the long run. Here are some of my top tips to see if paying off your mortgage early is possible for you.
Make a one off lump sum payment
If you come across an amount of money at once – you could have a large amount of savings or win the lottery – you could use some of this money to pay off a chunk of your mortgage.
First you would need to look at how much you still owe on your mortgage, you can do that by using the handy MortgageCalculators.info Loan Balance Calculator here.
However, make sure that you don’t have a fixed term mortgage as you may incur a penalty, so it is important to check this first.
Increase your monthly mortgage payments
Another way to repay your mortgage early and cut down on some of the interest you will be charged is to up your monthly mortgage payments. By paying as little as an extra £50 a month on top of your usual mortgage repayments can make a huge difference to the interest you pay back and it could cut down your mortgage term by a lot.
Before you do anything, make sure that there are not any penalties for overpaying. Most mortgage lenders will allow some level of overpayment, which is usually up to 10% of the total mortgage balance every year.
If you cannot afford to pay any extra every month, check to see if you can take advantage on any other deals and switch to a better mortgage rate.
Reduce the length of your mortgage
If you would like to pay off your mortgage earlier than expected, a simple way to do that is to ask your lender to reduce the term of your mortgage. This will increase your monthly repayments, but you will pay less interest in the long run.
This method will require some careful consideration as it is a much less flexible option than overpaying, which you can turn on and off when it suits you.