For most people, a mortgage is the largest financial
obligation they’ll ever have in life. Unfortunately, that means it’s probably
also the longest. When you buy a home in your 20’s, you can look forward to
paying it off perhaps in your 40’s - perhaps longer if you upgrade your home
and renegotiate a higher mortgage. However, there are ways to pay off your
mortgage faster, allowing you to attain that coveted “mortgage free” status
sooner than you realize.
Here are 4 mortgage-free-sooner strategies by Mortgage Broker in Vancouver:
Ways to Pay Off
Your Mortgage Faster #1:
Increase Your Payments
When you set up your mortgage payment, you’re told
what the payment amount will be. This isn’t the only payment amount you can
make, though. Why not bump it up just a little bit. For example, a monthly
payment of $300 bumped up to $350 probably won’t break your bank but, by the
end of the year, will have paid back another $600 onto your mortgage more than
you were expecting. That’s no drop in the bucket! It adds up. In a decade,
that’s $6,000 you’ll pay back sooner.
Ways to Pay Off
Your Mortgage Faster #2:
Increase Your
Payment Frequency
This strategy is sometimes offered by your lender or
mortgage broker when setting up the loan. If it’s not offered, you should
definitely ask. Accelerated payment schedules increase the number of mortgage
payments you make in a year (i.e., you might make two payments a month instead
of one). As you can imagine, this is a quick method to pay down your mortgage
sooner – just make sure you can afford the sustained frequency increase.
Ways to Pay Off
Your Mortgage Faster #3:
Lower Your
Interest Rate
A small change in interest adds up over time and can
mean thousands of dollars extra or saved in what you have to pay. Therefore,
when it comes time to renew your mortgage, work with your mortgage broker to
ensure that you are getting the most favorable interest rates available.
The first three ways are ways to consistently pay down
your mortgage faster. Here’s one more:
Ways to Pay Off
Your Mortgage Faster #4:
Make an
Additional Payment
When you get extra money, put some of it toward your
mortgage. For example, if you get a tax return or a bonus at work or even a
small inheritance, put some of that money toward your mortgage as a single
“lump sum” payment. One or two of these a year may not seem like a lot but they
add up.
Your mortgage can take years to pay off… but it
doesn’t have to take as long as you expected. Use these ways to pay off your
mortgage faster.
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