But before you get started, remember that everything comes with a price – you have a wonderful new home, but you also have likely just acquired a significant amount of debt in your new mortgage.
Not to rain on your parade, but before you go and get that luxury spa pool fitted, you’ll want to find out how to pay off your mortgage as soon as you can. We’ve put some great tips below to get you started.
Bear in mind that some mortgage types have penalties for early repayments so make sure you know the terms of your mortgage structure before you rush to pour all of your savings into your mortgage.
- Make lump sum payments
Received a raise at work? Come into an unexpected windfall? Use this extra cash to put towards your mortgage. It’s obviously not the most exciting thing you can do with your money, but it will absolutely get you one step closer to the financial freedom you’re after. Unless you win the lottery, putting in even just a little bit extra every payment can help in the long run.
- Pay your mortgage off fortnightly
It may not seem to make an obvious difference but making mortgage payments fortnightly actually helps you to pay it off faster. This is because banks calculate interest on any outstanding loan balance daily so if you increase the frequency of your payments, you’ll reduce your debt faster.
- Round your payments up
If your payments each month are $1732.35, round the number up to $1750.00 or $1800.00 – it’s not a huge difference now but it will be later. This way you won’t feel as though you are making a sacrifice by taking extra cash out here and there and you’ll learn to feel as though the $1750.00 or $1800.00 is the actual repayment amount.
- Rent out spare rooms
If you have any spare rooms that have the potential to be earning you money, find a long- or short-term tenant to help you pay off your mortgage. If your house is in a prime location, you’ll have potential tenants clamouring to live with you. There are also great perks that come with having a tenant, not only will you get to meet new people, but you can also claim back on any rental expenses.
- Downsize your home
Don’t feel like living with strangers? Maybe you don’t need those spare rooms after all. If your needs have changed over the years, consider selling your home to buy something smaller and more affordable.
If you’re keen to get cracking on paying off your mortgage faster but aren’t sure where to begin, speak to one of our helpful Haven mortgage advisers today. We’ll be able to see where you’re at and make sure you’ve got the mortgage structure that works best for you and your current needs.