A mortgage can feel like a chain around your neck, holding you back from being able to live a full and enjoyable life, especially when money gets tight. It isn’t uncommon for those with a mortgage to start looking for ways to pay it off faster. One of the most efficient ways to do this is by simply increasing your repayments – easier said than done, obviously, but not impossible. Here are a couple of ways you could go about doing so.
Ways to Increase Your Mortgage Repayments
1. Generate Extra Income
Supplementing your current income with a bit of extra cash can be accomplished a number of ways. You could pick up some extra work, either through a business of your own or through a second job. That way, of course, leads to you spending less time in the home you’re trying so hard to pay off. Stock trading could be another way to generate a regular supplement to your income, but you have to be smart about it. There are plenty of education providers like Learn to Trade who can show you the ropes through a number of easy-to-follow online courses and training manuals, but you’ll also need lots of determination and intelligence for this method to pay off.
2. Pay Fortnightly Instead of Monthly
Many people end up making their mortgage repayments monthly. By halving your monthly total and paying that fortnightly, you end up making one extra payment per year. There are generally around 4.35 weeks in a month, so there are 26 fortnights in a year rather than 24. Paying $3,000 every month will lop $36,000 off your total every year. Paying $1,500 every fortnight adds up to $39,000 a year off your mortgage. The amount you pay doesn’t actually change; you just make your repayments slightly – almost unnoticeably – more quickly, and this could eventually cut a significant amount of time that your mortgage is hanging over your head.
3. Interest Rates Fall; Your Minimum Repayment Does Not
A trap that a lot of people fall into when interest rates decline is seeing that drop as a few more dollars in their back pocket every month. Wrong. It’s actually a great opportunity to really make a dent in your loan. Being disciplined enough to keep your repayments where they are will see you reduce your debt much faster under a lower interest rate. True, you still can’t have much fun, but this way you get to spend time with your family and actually enjoy the home you’re working so hard to own outright one day.
Increasing your mortgage repayments is about working smarter, not harder. With a debt of this size, every little bit helps; any advantage should be seized with both hands. Like any other debt repayment strategy, every path to increasing your repayments starts with discipline. If you can master yourself and commit to a certain amount every month, and pitch in more where you can, you’ll be well on your way to paying that mortgage off early.
What are your favourite tricks for increasing your mortgage payments?
Share them in the comments.
This is an S2 POST.