Six simple hacks for paying off your mortgage quicker
Having a mortgage is an amazing feeling, it means you are paying off an asset such as a home or an investment property and you are building your personal wealth.
But building an asset this way can also attract some unwanted stress - nearly everyone with a mortgage also wants to pay it off quicker to reduce their interest costs.
Here are some tips that can help you pay off your mortgage quicker.
1. Match your repayments to your pay cycle, makes budgeting easier and the money is in the loan sooner. For example, if you get paid on the 15th and 30th of each month, ask the bank to change your repayment dates to the 16th and 1st of each month so you know the money will be there when the bank needs it.
2. Be savvy with your savings. Pop them in an offset or redraw account which will save interest and make your repayments go further.
3. Round up your payments. How far can you go - to the next $10, $50, $100, $1000? Rounding up your payments is an easy way to start paying off your mortgage quicker, start small and increase over time as you get more comfortable with your savings.
4. Review your rate regularly. Better you enjoy the savings than pay too much interest and speak with your broker regularly to see who is offering the best rate.
5. Set yourself a time goal - and smash it! Use an online calculator to work out how much you need to repay to have it gone in 25, 20, 15 - even 10 years!! Or gamify your mortgage by setting a deadline to shrink the balance to $x by a date and track it. You can't change what you don't measure, so get to know your numbers and track your progress.
6. Flip your banking around - instead of sending all your cash to your savings and then aiming to pay more on your loan, get a minimum figure sent to your savings and all the rest straight into the loan and that includes any overtime bonuses as well.
Paying off your mortgage quicker is a commitment and isn't something that will happen unless you make it happen.
It also isn't just about paying more than your standard monthly repayments.
It is also about the timing of the repayments and being savvy about your banking processes.
Whilst paying off your mortgage quicker does take time and effort, just keep thinking about that magic day when you know you no longer need to make mortgage repayments and the money that you earn is all yours to play with.
Close your eyes and imagine what that looks like.
Now open that spreadsheet and start working on your short and long-term goals.