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Signing on the dotted line for your new home is an exciting time… until you see how long you’ve committed to pay it off. Whether it’s 15 or 30 years, having a mortgage - regardless of how big - can be daunting. If you’ve ever looked at the seemingly endless amount of debt and wondered how to pay off your mortgage faster, here are some things you can do.Â
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Why should you pay off your mortgage faster?Â
Why should you pay off your mortgage faster? Simple - you’ll be a lot closer to achieving financial freedom. By paying your mortgage off sooner, you’ll significantly reduce the interest you’d otherwise have to pay and become one step closer to living the life you want. Based upon an average home loan in Australia of $608,448 over 25 years at an interest rate of 5.42%, making an extra contribution per month above the minimum repayment amount could save you 11 years and one month in time or $245,211 in interest.How to pay off your mortgage fasterÂ
Sounds like a dream, right? Fortunately, there are a few things you can do to turn this dream into a reality.ÂRefinance and review your rate regularly
We can’t stress the importance of this one enough! Regularly refinancing and reviewing your home loan rate can save you thousands in interest charges. You should be looking to refinance every two years or after any significant life changes. Check with your Inovayt mortgage broker whether you’re receiving the best rate to reduce the interest you pay. Your broker can then assist you when deciding whether to change lenders. Provided the benefits of refinancing outweigh the fees of staying with your current lender, it’s a good idea to make the switch. Want to find out how much refinancing could save you? Check out our free refinancing calculator.ÂSet yourself a goal
Setting yourself a goal can help provide some motivation and structure to pay off your mortgage faster. Ensure your goal is SMART (that’s Specific, Measurable, Achievable, Relevant, and Time-bound). For example, your goal might be to contribute a specific amount of extra money to your minimum mortgage repayments to reduce your loan length by five years). ÂIncrease your regular repayment amount
If your budget allows, consider increasing your minimum repayment amount. This is an excellent opportunity for those with lower interest rates or those with the capacity to repay their loan. Any extra money you pay will go towards your principal amount rather than just covering the interest. By reducing the total amount you owe, you’re reducing the interest you need to pay.  While interest rates are rising, this strategy may not be as achievable, but if you want to look into it, have a chat with your Inovayt mortgage broker. Â
