3 Ways To Pay Off Your Mortgage Early in Mississauga
Thursday Dec 22nd, 2022
Many homeowners with 30-year mortgages feel like they'll never be debt-free. However, there are several ways to pay off a mortgage faster and save money on interest payments without selling the home or refinancing.
How To Pay Your Mortgage Off Faster
Here are three simple strategies to consider:
1. Biweekly payments
Instead of making payments once a month, you can ask your mortgage lender to accept biweekly payments, dividing the monthly amount in half. With this approach, you'll make 26 payments yearly, paying down more than you would if you made 12 monthly payments.
The reason is that there are 13 four-week payment periods in a year instead of 12 months, allowing two extra biweekly payments. And it adds up to your advantage. For example, you could cut three years off your mortgage and save more than $16,000 by making biweekly payments instead of monthly ones on a 25-year mortgage of $300,000 at 3%.
2. Rounding up
Another easy way to make faster mortgage payments is to round up your regular payment by a small amount, whether it is monthly or biweekly. For example, if you pay $575 every two weeks, consider bumping it up to $600. Most homeowners don't notice the small additional amount in their regular budget, and the savings can be substantial. A good time to start rounding up is if you receive a pay raise at work.
3. Extra payments
A third way to speed up your mortgage payments is to put in extra money when it comes your way, like through a tax refund, inheritance or work bonus. You must be disciplined to do this, though – the lure to spend it on other luxuries is strong! It's also advisable to speak with your mortgage lender before you pay down a lump sum, as certain rules and restrictions may apply to your specific mortgage.
For more information, don't hesitate to contact Deborah Clerk, Real Estate Sales Representative, ASA, at Keller Williams Realty, Brokerage, in Mississauga.