Looking to pay off the mortgage on your home or investment property faster? Here are a few tips that can help you be debt free as soon as possible.
Increase the Frequency of Your Repayments
Mortgage interest accrues daily, so making payments as soon as possible can decrease the interest accrued, even though you are still paying the same amount in total towards the mortgage. Try rearranging your payment schedule to fortnightly rather than monthly.
Make Lump Sum Payments
When you find yourself with an unexpected cash lump sum, put it towards the mortgage. Check with your lender about their rules regarding lump sum payments, as there may be limits to the amount you can pay off in this way without penalty.
Arrange a Mortgage Offset Account
A mortgage offset account is a transaction account linked to your home loan. For the purposes of calculating interest, funds in the account are offset against the value of the loan. This can save you a substantial amount of interest, especially if you are also saving for a large purchase such as a car or a holiday. Generally, there should be a minimum amount in the account at all times for an offset account to work in your favour.
Take out a Loan with Yourself
When you get a raise at work or if interest rates go down, don’t see this as extra disposable income. Instead, aim to keep putting the same percentage of your income towards the loan. This will allow you to be debt free sooner over the long term, and won’t mean any drop in your existing quality of life – it will just mean continuing to live as you have been rather than indulging in new luxuries.
Property Investment Coaching
Add a granny flat to pay off your mortgage in approx 10 years.
Do a development and pay your mortgage off in 1 year.
For more property investing advice, contact Rass Global Investments.