Home Finance How to Pay Your Mortgage Early and Save Thousands

How to Pay Your Mortgage Early and Save Thousands


Think about how amazing it would be to finally own your property without having to make any more monthly remittances. That will give you a whole lot of extra funds to put into other needs, asset investments and even wants.

It can be a daunting task having to completely offset your mortgage. After all, it involves hundreds of thousands and, except if you win the lottery, finding that kind of money at once would be difficult.

However, there are financially prudent ways to shorten the repayment period and improve your equity; meaning you save a lot of money in interest payments. Here are smart techniques to pay your mortgage early and save thousands of dollars.

  1. Increase your repayment sums

The shortest route to quickly offsetting your mortgage is to increase your repayment amounts. By adding extras sums to your repayment schedules, you can reduce the overall term loans and shave off thousands of dollars in interest.

When you increase your payback amount and shorten your mortgage timeline, you’ll be able to make extra savings.  It’s the principle behind the aggregate mortgage plus interest you pay at the end of the day.

  1. Refinance your loan into a shorter-term plan

Think about cutting your loan-plan by half or three quarters, whichever one is possible and convenient for you. For example, if you have a 30-year mortgage, if you can afford it, consider halving it into a 15-year refinancing plan. It will help you get through the mortgage faster and fetch you an improved interest rate, as shorter loans terms typically mean lower interest rates.

Refinancing your loan into a timeframe that’s half of your original plan, does not automatically translate to double the payment. Instead, it becomes significantly less when aggregated.

Take out a mortgage calculator and play around with the figures to calculate how much a 15-year refinance of your mortgage would cost you. If your calculation returns a figure that is not convenient or practicable for you, then consider rescheduling it into a 20-year loan plan instead.

  1. Channel any unexpected extra incomes or windfalls into your repayment

Got a surprising bonus or raise at work? Or received a huge financial gift from a relative? Perhaps your garage sale was more successful than you’d anticipated. Or you’re lucky to fall into the bracket of taxpayers who received a refund in the year.

Don’t let that money to waste or fritter it away on some needs you can do without in the interim. Rather, put that extra cash into your home loan repayments, meaning you can reduce your mortgage term with money that wasn’t factored into your annual budget.

  1. Explore any unique features of your mortgage plan

There are some very valuable mortgage plans, with features you can explore to ease your repayments or keep the interest down. Investigate any helpful tools and guides your home loan comes with, to help you understand the process better and make your journey to owning your own home easier and more enjoyable.


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