Five ways to pay off mortgage faster
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I'm a Toronto-based Mortgage Broker. My focus: to mentor and educate first-time home buyers, people with less-than-perfect credit, and people in business for themselves, to make the best mortgage choices for them.
Five Ways to Pay Your Mortgage Off Faster
Looking for the best ways to pay your mortgage off faster?
Looking for tips to pay off your mortgage in the shortest amount of time? For most of us, paying off our mortgages as quickly as possible is a huge priority.
Simple ways to pay off mortgage faster
Here’s how to shorten the life of your mortgage and reduce the amount of interest you’ll pay over the years.
1. Round your mortgage payments up
Rounding the payments up to the closest $100 or $50 is a little extra that adds up over time.
2. Pay a lump sum whenever possible
Use your tax refund, your annual bonus, or if you’re lucky enough to get one, an unexpected cash gift, and put the money against your mortgage. Most lenders allow you to pay up to 15% – 20% of your mortgage amount each calendar year.
3. Increase payments when you get a raise
Most lenders will allow you to increase your payments, and again, you are typically entitled to increase them by 15 – 20% per year. Take advantage of this flexibility!
4. Make bi-weekly accelerated payments
If you do this, you’ll end up paying more toward the principal each year. Start doing this from the beginning, and you can pay your mortgage off years sooner. Not only that, but if you are paid bi-weekly, it makes your life simpler too!
5. Keep payments the same when mortgage rates have fallen
If you have a variable rate mortgage, or when your mortgage is up for renewal and the interest rate has dropped, keeping your mortgage payments the same as before can save you thousands of dollars in interest.
Want inspiration?
Check out this article in the Financial Post – in which the author describes how he and his wife paid off their mortgage in five years. Aggressive? Definitely. But, it does show that if you’re disciplined and motivated, you can pay off your mortgage earlier than you think.
To read more of my mortgage paydown tips, check out my other blog articles here.
And, if you’d like to run some scenarios on paying your mortgage down faster, I’d be happy to help – please get in touch with me!
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