How to pay off your mortgage faster

There’s nothing quite like the feeling of walking into a home, you own. That sense of certainty, of ownership and commitment. Putting money to something that’s yours. It’s a feeling that renting can’t emulate.

Date:

01-Aug-2019

Category:

Buying

Tags:

Author:

Amanda Smith

How to pay off your mortgage faster

There’s nothing quite like the feeling of walking into a home, you own. That sense of certainty, of ownership and commitment. Putting money to something that’s yours. It’s a feeling that renting can’t emulate.

But, then, there’s the other side to that coin.

The fear, that comes with committing for 30 years. The sacrifice and possible limitations. It’s why some people choose to rent for life, to maintain a level of freedom.

Well, it’s not all black and white. You can own a house and pay it off faster.

As you know, we’re real estate agents. We don’t claim to be financial advisors, but we do meet hundreds of people each year, on this same quest to financial freedom through property.

Have you got a mortgage? Thinking of buying a home? These five tips should provide food for thought, on how you can reduce your house debt.

A house should bring you freedom.

Don’t let your mortgage lock you in.  

Let’s start with the basics.

1. Make more frequent payments

More in, less out. More income, less expenses. Check with your home loan provider to work out how you can make extra contributions. Making regular payments will, of course, reduce the interest you pay over the term of your loan.

Just got a tax return in? Why not put that into your mortgage. Over time, these additional payments will compound… potentially cutting off years from your loan. Speaking of your loan, explore refinancing every few years to ensure it meets your needs, as they evolve. Check for lower interest rates and better deals. Call this your ‘annual home loan health check’.

2. Check that your loan is portable

You might want to move house during the life of your mortgage. Chances are, in 30 years, you will. Make sure your lender will allow you to transfer your mortgage to a new property (without charging you huge fees to do it). Before you consider selling your house, explore any discharge costs and establishment fees. And, of course, partner with a local real estate agency in the Adelaide Hills to help you through this process.

3. Forgo the little luxuries

That tiled kitchen splashback, that free-standing bathtub and that sunroom extension. Spend too much time on Pinterest and your “I want…” list will get out of hand. This is the bit you don’t want to read. But, it’s the message that’s most important. Know how to differentiate between what you want and need. This will keep your equity ‘safe’ from unnecessary renovations and updates (that add years to your mortgage).

4. A healthy ‘money mindset’

You probably won’t hear this tip from financial advisors. It’s not about how much money you make, save or invest. But rather, touching on the mindset of money management and your relationship with it.

It’s about living more by design, rather than default, and being actively engaged with your money. The Barefoot Investor is a great resource to help you map out your finances, no matter what your situation looks like. 

5. Know your end game

Think about the big picture. Is your goal to pay off your house and be debt-free? Or, is financial freedom through multiple properties your focus? Stay present but make your decisions through a long-term lens.

If you’re interested in talking to real estate agents in the Mount Barker region, we’d love to sit down with you and discuss your plans. Fill in your details in the contact form and our property team will get in touch.

We all have mortgages, too.