Looking for ways to pay your mortgage off faster? We have found three ways to shorten the long mortgage journey provided by The Globe and Mail:
- Instead of monthly payments, try biweekly. There are 13 four-week payment periods in a year, opposed to 12 months, allowing two extra biweekly payments. Contributing more payments in a single year will decrease the amount of time it would normally take to pay off your mortgage.
- Round up your regular payment by a small amount. For example, if you pay $575 every two weeks, consider moving that to $600. You likely will not notice the extra amount, but it will make a large contribution to your overall mortgage.
- Put down extra amounts if the funds are available. If you come upon an inheritance, receive some money through your tax refund, or get a salary bonus, consider putting that down on your mortgage. Your mortgage consists of two components, principal and interest. The faster you pay down the principal, the less interest accrues over time and the less you will end up paying in total. However, be aware of the lender’s rules and fine print regarding paying your mortgage off prior to the full term. Some may penalize the borrower for paying off their mortgage early, others allow a certain prepayment on the mortgage anniversary each year. Always stay informed by your lender!
For the full article, please visit The Globe and Mail.