Did you recently check the present status of your home loan and the progress you are making? If not, it is about time you did that. Why? Tracking your mortgage could genuinely help you to save a great amount of money while, at the same time, you can make your mortgage repayment increasingly faster.
This way, the thought of financial freedom can become a reality sooner than you think. Consider the following tips.
Fast Track Your Mortgage Repayment
- Make smaller payments on a regular basis
One simple way of fast tracking your mortgage repayment is by dividing your loan into smaller amounts of money that you pay more often, on a regular basis. While this will help you to pay off your loan faster, it will also contribute to diminishing the lifespan of the loan, as well as the amount of interest you pay.
Let’s say that you make your mortgage repayment once per month. Instead, you should think of making fortnightly repayments. If you pay $2400 per month, divide this sum in half and, instead, pay $1200 fortnightly. This means that instead of paying $31,200 per year, you will only pay $28,800.
- Increase the sum you typically pay
Believe it or not, by adding as little as an extra $10 to the amount you usually pay on a regular basis as mortgage repayment, you can genuinely reduce the lifespan of your loan. A good idea would be directing your tax returns, bonuses and gifts into your mortgage. It takes discipline and willpower but it is a possibility you should take advantage of.
- Don’t diminish mortgage repayments when interest rate drops
In the light situation in which the interest rate is smaller than normal, and, as a result, your mortgage repayments are diminished, don’t fall into the trap of paying less. If you continue paying the same sum of money, you will manage to make considerable progress with your loan, decreasing the amount of interest.
- Opt for an offset account
If it’s a viable possibility, consider opting for an offset account. A mortgage offset account is linked to your loan. The monthly interest is calculated by subtracting from your loan the sum that you have in your offset account. You can consider directing your savings into this account. The main advantage of an offset account is that it will save interest while you can benefit from accessing your savings account as well.
- Consider a better deal
And last, but not least, your mortgage should meet your individual requirements and financial situation. If you feel overwhelmed by your mortgage repayments, consider talking to your broker about changing your loan. You can talk about making additional repayments, or look into refinancing options.