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How Do I Pay Off My Mortgage Sooner and become Mortgage Free?

To become Mortgage Free, Pay more, more often.

Want to pay off your mortgage early? Then make bigger mortgage repayments, more frequently. You’ll own your own home sooner and save a bundle on interest.

Act now – you pay most interest up front.

Most mortgages are structured so that you pay off most of the interest in the early years. If you are serious about wanting to reduce the interest you pay on your Home Loan, you’ll act now.

Get rid of car loans and credit card debt.

You’re generally paying a higher interest rate on small loans (e.g. a car) and your credit cards so it makes sense to eliminate those debts first. So, put a rein on your credit card usage and then tackle your mortgage.

Make sure you’re paying off the right mortgage.

When you entered the mortgage market, you might not have been as well informed as you are now. Or the market might not have been as competitive. Stay in close contact with your MFAA member. They can let you know if there is a new home loan product that will save you money over the term of the mortgage.

Flexible mortgages.

Most debt-retirement strategies depend on you being able to pay off more of your mortgage sooner. Read the fine print or talk to your MFAA member to see if you have the flexibility you need to reduce your interest charges.

Pay more and pay often.

Assuming you have a mortgage that lets you pay extra, you should pay more and pay often. The interest charged on a $ 300,000 home loan at a rate of 7.15% over 30 years with monthly repayments is over $ 420,000. By paying off an additional $ 50 a month, you’ll reduce the interest bill by $ 39,000 and your loan term by 2 years and 4 months. You could look at making repayments weekly or fortnightly rather than monthly. Over 30 years the savings add up. To learn more, talk to us today today.

Information source: MFAA

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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.


About the Author

James commenced Mortgage Brokering in 2009 and launched the Mortgage Broker business "Your Home Loan Consultant" in February 2012. With over 10 years of experience in the finance industry, our team in Brisbane are here to assist you. We pride ourselves on transparency and communication, and no matter what you need – we are never more than a phone call away. Your Home Loan Consultant is a full-service Mortgage Brokerage. Assisting first home buyers to get into their own home and then with the correct guidance show them how to create wealth through property investing.

James Sylvester

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