How can I pay down my mortgage faster?
I really wish I was asked by clients more often, “how can I pay down my mortgage faster”. Not enough people take advantage of this. For those who are interested, here are some tricks for you:
- Shorter amortization periods clearly decrease the life of your mortgage
- Bi-weekly (accelerated) payments significantly reduce the length of your mortgage
- Lump sum payments. Most lenders allow you to repay up 20% of the original mortgage amount
- Monthly payment increases. Most lenders allow you to increase your monthly payment up to 20%
If your budget it too tight for a bi-weekly payment, you are probably over-leveraged and shouldn’t be taking a mortgage of that size in the first place. Be wary of certainly lenders who offer slightly lower interest rates to entice you but fail to mention heavy restrictions that don’t allow for early repayment. It is our goal to protect you from these restrictions.
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Remember to Own Your Life and have a nice day!