Looking for ways to pay that mortgage off earlier?

Here are some suggestions…

1. Reducing your amortization period
2. Increase your monthly mortgage payments.
3. Make lump sum payments.
4. Change the way you make payments.

Reduce your amortization period

It's a simple one, and for obvious reasons, reducing your amortization period can significantly reduce the time it takes to pay off your mortgage. The added benefit is you can save a ton on interest too.

Taking a $100,000 mortgage at 5% from a 25 year amortization period to a 15 year amortization period will save you $32,619.21 in interest cost over the life of the mortgage.

Increase your monthly mortgage payments

Every little bit helps. If you can afford it, consider increasing your monthly mortgage payments by as much as you can. On a $100,000 mortgage with an interest rate of 5%, increasing your monthly mortgage payment by just $50.00 per month will pay that mortgage off in just over 21 years as opposed to 25 years.

Reducing your amortization period and increasing your monthly mortgage payment work hand in hand. Reduce your amortization period, your monthly payments go up just as increasing your monthly mortgage payments will reduce your amortization period.

Make lump sum payments.

Most financial institutions will allow you to make lump sum payments up to 10% of the outstanding balance once a year. Adding a lump sum payment means you pay less interest and are reducing your amortization period. Your monthly payments then take a bigger bit out of the outstanding balance of the mortgage.

Change the way you make payments.

Most financial institutions will allow you to determine the way you want to make payments. Consider making payments twice a month as opposed to monthly. An even faster way of paying off your mortgage is to make accelerated bi-weekly payments. The spin-off from doing this means you pay less interest on the borrowed money, reduce your amortization period and pay your mortgage off quicker.

There are lots of great ways to reduce the time it takes to pay off that mortgage and the undefined undefined undefined undefined undefined undefinedMortgage Team would be happy to discuss various mortgage options and get you on the fast track to saving money with little effort.

Whether your purchasing a new home, looking to refinance your existing home, find a better rate on your existing mortgage or looking to get pre approved for a mortgage, undefined undefined undefined undefined undefined undefinedhas the knowledge, and experience to help.

Mortgage Glossary – Don’t understand some of the terms used in these articles? Our mortgage glossary provides simple definitions.

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