Are you tired of making mortgage payments? You’re not alone. Many Australians have to allocate part of their monthly income to mortgage payments, and although they knew what they were getting into, they are all waiting for the day it’ll all be over.
Many people don’t know that there are things they can do to shorten this period and get out of debt faster. This post will give you some tips on how to pay off your mortgage quicker:
- Consider Making Additional Payments
The thought of paying more than your required monthly instalment might frustrate you. You already pay enough towards your mortgage, so why would you sacrifice funds you could use on something else to make extra payments for your loan?
The temporary inconvenience is something you’ll be thankful for later, though, as it will help you pay off your whole debt faster. Those extra payments will help decrease the mortgage by months and even years, and they can also decrease the interest.
Of course, before making an additional payment, you should ask your lender if you will have to pay any fee for that.
Another thing you can do to shorten the lifespan of your mortgage payments is to switch lenders. You might find a lender that has better features and lower interest, making monthly payments easier to handle.
- Don’t Go for Interest-Only Loans
Interest-only loans may seem like a good idea as the only payments you make are for the interest on the amount borrowed. However, they will not help you decrease the principal during the years you only pay interest, resulting in you paying more interest while your debt remains the same.
Principal and interest loans represent the best option if you want to pay off your loan faster.
- Go for the Offset Account
People who choose offset accounts do it because they help reduce the amount you owe on the home loan. This type of savings account will not only decrease the amount you owe through the offset account balance but will also take down the amount you pay in interest.
This feature is only convenient if you have a higher offset balance, so you shouldn’t rely on it otherwise.
- Consider Better Interest Rates
Find a much lower interest rate. You can do this by comparing the loan’s interest to similar mortgages. Once you find a better option, you can reach out to your lender asking for a cheaper alternative or a match.
- Consider Fortnightly Payments Instead
If you want your debt to be paid sooner, you could switch to fortnightly payments. Doing so could help you gather about one additional installment per year, which will help you in the long run.
If you follow these tips, you’ll be able to pay off your mortgage faster. Compare these options and implement the method that works best for you.