Being mortgage-free is said to be something that most strive for. Being without debt is not only freeing but gives you choices you otherwise may not have. Here are some things you can do to become mortgage-free sooner than planned.
Switching to a better mortgage deal is a step in the right direction. Not only can you get a better rate, but you can also alter your outstanding term. Reducing your term will more than likely mean increased monthly payments, but if you are paying less interest too, it may not make a huge difference. A shorter-term means less interest, potentially saving you thousands in the long run. There are many mortgage options available depending upon your circumstances. An online mortgage comparison will provide you with current rates, terms, and potential monthly payments.
Consider an offset mortgage
If you have savings you do not want to put towards your mortgage, an Offset mortgage might be ideal. These are linked to your savings. If, for example, you have an outstanding mortgage of £100,000 and savings of £20,000 you will only pay interest on the difference (i.e., £80,000) allowing you to save even more month to month. This is a great way of using savings to reduce your payments but knowing that they are still accessible if you need them. This, of course, only benefits you if interest rates on your savings are less than your current mortgage rate.
Whether it be paying slightly more each month or making a lump sum capital repayment, overpaying your mortgage will speed up the redemption process. Make sure you check with your lender what they will allow. This will vary depending on what mortgage product you have. Redemption penalties may be charged if you don’t adhere to the terms and conditions.
When kids leave home, we may find that we no longer need as big a place. If you have a decent chunk of capital tied up in your existing home then downsizing can be a quick way to become mortgage-free. It could mean you can ditch the mortgage completely and buy a smaller, less expensive home outright.
Change your lifestyle
Many people decide to spend two or three years living minimally. No more holidays, fewer luxuries and a real focus on spending can result in increased savings. These savings can then be used to make a capital repayment towards your mortgage, taking you a step closer to the end goal.
Sell any unwanted belongings
Most of us have hundreds of pounds of unwanted belongings lying around the house that we don’t use or need. Go through every room in your home and set aside anything you think may have some value. Selling online has never been easier, and there could be money to be made. Whether its children’s toys or old mobile phones, it all adds up. Not only will it give you a welcomed lump sum, but it will also help declutter your home in the process.