How to Pay Off Your Mortgage Faster

July 3, 2024

24
Want to save on interest and get rid of your mortgage quicker? Here are some easy ways to do it:
  • One effective method is to make extra payments. Instead of making one payment per month, try paying half your monthly mortgage payment every two weeks. This adds up to 13 full payments a year instead of 12. Additionally, whenever you have some extra money, each month consider making an overpayment. This all helps to reduce the interest you pay over the life of the loan.
  • Another option is to refinance your mortgage. Switching from a 30-year to a 15-year mortgage means your monthly payments will be higher, but you’ll pay less interest overall. You may have taken the mortgage over a longer term initially to keep the payments down but if your circumstances have changed e.g. new job, pay rise etc the consider changing your mortgage term.
  • Increasing your monthly payment amount is another simple strategy. If your mortgage is £950, round it up and pay £1,000 instead. You can also set annual goals to boost your payments each year, using bonuses or raises to increase your mortgage payments.
  • Lump-sum payments can significantly reduce your mortgage balance, using unexpected money like tax refunds or work bonuses to pay down your mortgage. In addition, savings from monthly budgeting and cutting back on expenses can also be allocated towards your mortgage.
  • Consider using an offset account, there are options where you can link a savings account to your mortgage, so your savings offset against the mortgage balance and the amount of interest you pay is calculated on the difference meaning more of the usual monthly payment is going towards reducing the mortgage balance rather than interest.
Paying off your mortgage faster is all about using simple and smart strategies: making extra payments, refinancing, using windfalls, tweaking your budget, and leveraging savings. Each method can help you save on interest and become mortgage free sooner, always remember it’s important to understand what your lender will allow as you could incur a penalty and there are other financial investments to consider for any surplus cash/savings before deciding to overpay on your mortgage.

Answered by:

Simon Glass

Senior Mortgage Operations Manager

Last Updated:

03.07.2024

Answered by:

Simon Glass

Senior Mortgage Operations Manager

Last Updated:

03.07.2024

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