Tips to Pay Your Mortgage off Early

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There are many things you can do to repay your loan early, which can save thousands of dollars in interest. There are more options than just making large lump sums, and you'll be surprised at how much money you can save - and how much quicker you can pay off your mortgage - just by taking several small steps.

The best choice usually comes down to what is easiest for you, and which approach you are likely to stick with. The important thing is to choose a strategy and try to stay with it. Here is a list of tricks that can help you become mortgage-free sooner:
  • Pay more frequently
  • Make lump-sum payments
  • Keep payments the same when rates fall
  • Raise your payments with your income
  • Put your tax refund to work

To see these in action, let's say you have a home mortgage loan of $100,000 at 8 per cent interest over 25 years. You might employ the following strategies to pay the mortgage off faster:

  • Make weekly rather than monthly payments
  • Round your payments up from $190.80 to $200
  • Increase the weekly payment by $5 each year
  • Make annual lump sum payments (using your income tax refund, for example). Start by paying $500 on the anniversary of the loan, then increase the payment by $50 every year after that

None of these steps are too dramatic, but they would allow you to retire the mortgage loan in about half the time and would cut your interest bill in half.

Remember, a bank doesn't want to encourage you to pay the loan back early, but we look after your interests first! At Mortgage for Less, we'll arrange the best mortgage product for you when you apply and help you implement our strategies so that you can get the best mortgage rates and pay your loan off faster.

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