14 January 2020
There’s something particularly scary when you first get a mortgage – that huge financial commitment, the length of time (25 or even 30 years) that leads every first time buyer doing the maths “I’m 28 now, so that means my mortgage will finish when I’m… hang on, that CAN’T be right!”
What’s more, the mortgage is secured against your property, so in all of those decades, if anything goes wrong it is your home that’s at risk.
After dreams of a Lotto win, being free of a mortgage is probably many people’s close second. Who wouldn’t want to be rid of that liability and monthly expense?
How Fast Can You Pay off Your Mortgage?
Well, although there is no quick fix (aside from a Lotto win obviously!), there are a number of pretty easy and painless ways to at least get to that debt-free utopia a little sooner.
The earlier you start, the bigger the results will be and believe me, it’s very likely that your 55 year old self will thank the younger you for doing it!
Here are some ideas to get you started but remember, financial decisions are complex so always get advice before making commitments, these are just to help you decide what might work for you…
- Check the terms of your mortgage, if you can overpay and have interest added daily, don’t make a monthly payment, make it weekly or even every day – you’ll be chipping away much faster.
- If you can afford it, add an extra month’s payment every year, so 13 not 12. Over 30 years, with a £200,000 loan at 5% interest, you could save £34,000!
- Offset mortgage? Put as much money as you can into a lined account to minus off the interest. If you have savings elsewhere, consider moving them in to your offset account, chances are the interest you’re earning is less than your mortgage rate, especially if you’re a tax payer.
- Look in to shortening the term from say 25 to 22 years. The repayment will go up but you’ll hit your goal sooner. Just remember you’ll also lose some flexibility though so be cautious.
- Rent a room. You can earn £7,500 tax free from a lodger – that’s £625 a month to pay off your debts.
- Look in to renting out your driveway or garage to make more easy cash.
- You could rent out your home when on holiday too using AirBnB or similar although this takes a lot of commitment!
Consider what might work for you, do some homework and begin the journey to getting mortgage free faster.
Get a cash offer from a member of The NAPB, without obligation. Many offer an ‘all in’ price so you know what you’ll be getting from the very start. And whatever is left after the mortgage is paid, is yours to keep!