Paying your mortgage is usually the biggest deduction from your salary every month, so imagine how much better off you would be if you could pay off your mortgage early. To do this you will have to make some sacrifices, but by making a few changes and sticking to them you can seriously reduce the terms of your home loan and live mortgage free.
Increase your repayments
To increase your repayments, you either need to earn more money or cut back in other areas, or even do both. If you are looking to earn more money, then maybe you could consider applying for a new job. By increasing your repayments you can shave years off the term of your home loan and save a fortune on interest . Always check with your lender how much you can overpay each month and confirm that there are no penalties for overpayments.
Cut Back On Non Essentials
You would be amazed how much money you waste each month on non-essentials. By cutting back you could save hundreds of pounds which you could pay of your mortgage. By making small changes such as taking a packed lunch to work instead of eating out, drinking instant coffee at work instead of calling into your favourite coffee shop, going out every other weekend, and cycling to work, you could save a small fortune. Even the smallest saving and extra payment off your mortgage can make a huge different on the compounded interest you would pay over 25 years.
Earn Extra Money
If you can earn extra money to pay off your mortgage then do so. As well as taking a better paid job, there are other ways that you can earn extra money that you can pay off your mortgage each month. Why not rent out a room? You could earn an extra £300-£600 per month depending on where you live that you could pay straight off your mortgage. Any additional payments will really reduce the term of your mortgage and the interest you pay, and by renting a room out, you could actually pay a significant amount off each and every month with very little effort.
Get A Better Mortgage Deal
If you can find a better mortgage deal, you will actually be paying your loan off faster. Look for lower interest loans to help you save money each month on interest so that more of the money you are actually paying each month, comes off the value of your home loan.
Don’t Borrow Against Your Home
This is probably the number one rule if you are wanting to get your mortgage paid off. No matter what you want to buy or how good the deal looks, do not borrow against your home if you want to get it paid off. Property prices can go up and down, and you may be in positive equity now, but that can change and prices can go down. Always avoid this kind of borrowing and focus on getting the balance reduced and increasing your stake in your biggest asset.
Overall: Set yourself a goal and stick to it no matter what temptations are put in your way and before you know it you will own your own home in much less time than you originally thought.