Paying off your mortgage can be a daunting task, especially if you have a long loan term and a high interest rate. But what if there was a way to pay off your mortgage faster and save on interest? In this blog post, we will share 10 tips to help you pay off your mortgage sooner and save on interest in the process. From making biweekly payments and rounding up your payments to refinancing to a shorter loan term and using your home’s equity, we’ll explore a variety of strategies that can help you pay off your mortgage faster and achieve financial freedom. Whether you’re just starting out on your homeownership journey or you’re well into your mortgage term, these tips can help you get ahead and reach your goal of paying off your mortgage sooner.
- Make biweekly payments: Instead of making one monthly payment, try splitting your payment in half and paying every other week. This will result in 26 half-payments, or the equivalent of 13 full monthly payments each year. This can help you pay off your mortgage faster and save on interest.
- Round up your payments: If you can’t afford to make biweekly payments, you can try rounding up your monthly payments instead. For example, if your mortgage payment is $750 per month, you could round up to $800 per month. This extra money will go towards paying down your principal balance, helping you pay off your mortgage faster.
- Make extra payments: Any extra money you have on hand can be used to make additional payments towards your mortgage. This could be money from a bonus at work, a tax refund, or even money you receive as a gift. The more extra payments you make, the faster you will pay off your mortgage.
- Refinance to a shorter loan term: If you have a longer loan term, such as a 30-year mortgage, you may be able to save money on interest and pay off your mortgage faster by refinancing to a shorter loan term, such as a 15-year mortgage. Keep in mind that refinancing can be a lengthy and costly process, so it’s important to weigh the pros and cons before making a decision.
- Shop around for a lower interest rate: If you can’t afford to refinance to a shorter loan term, you may be able to save money on interest by shopping around for a lower interest rate. Even a small difference in interest rate can make a big impact on your mortgage payments over time.
- Consider a mortgage accelerator program: A mortgage accelerator program is a financial product that allows you to make additional payments towards your mortgage each month. These payments are then used to pay down your principal balance, helping you pay off your mortgage faster. Some mortgage lenders offer mortgage accelerator programs as part of their standard mortgage products, while others offer them as a separate product that you can add on to your mortgage.
- Make your home more energy efficient: Making your home more energy efficient can not only save you money on your energy bills, but it can also increase the value of your home. Some mortgage lenders offer special mortgage programs for energy-efficient homes, which may allow you to qualify for a lower interest rate and pay off your mortgage faster.
- Rent out a room: If you have an extra room in your home, consider renting it out. The extra income can be used to make additional payments towards your mortgage, helping you pay it off faster.
- Downsize your home: If you’re no longer using all the space in your home, or if you’re struggling to afford your mortgage payments, downsizing to a smaller home may be a good option. A smaller home means a smaller mortgage, which can help you pay off your mortgage faster.
- Use your home’s equity: If you’ve built up equity in your home, you may be able to use it to pay off your mortgage faster. One option is to take out a home equity loan or line of credit and use the proceeds to pay down your mortgage. Another option is to refinance your mortgage and use the equity in your home to pay off the balance of your mortgage. Both options can help you pay off your mortgage faster, but it’s important to carefully consider the pros and cons before making a decision.
By implementing some of the strategies outlined above, you can save on interest and achieve financial freedom that much sooner. Whether you choose to make biweekly payments, round up your payments, or refinance to a shorter loan term, there are many ways you can take control of your mortgage and pay it off faster. Just be sure to carefully consider your options and choose the strategy that works best for you and your financial situation. With dedication and hard work, you can pay off your mortgage sooner and enjoy the peace of mind and freedom that comes with being debt-free.
Important: This article should not be taken as strict financial advice, please speak to your financial planner, accountant or bank to discuss your specific situation.