You don’t have to paint your house into a rainbow colored billboard to cope with mortgage payments. There are many other ways you can pay off your mortgage faster, though not completely free, that we are going over today for all of our North American readers. In Canada the average mortgage has an amortization period of 25-35 years (roughly the same in the US) but using these tips below will help you accelerate your road to being mortgage free:
- One tip from Bankrate.com is to add surplus payment whenever you can to the principal. Adding even what may seem like a small amount to your principal will help shorten the length of your loan and also reduce the amount of interest you have to pay. Rounding your monthly payments up slightly to the nearest ten or hundred dollars will help you find savings too.
Although the extra few dollars may not seem much an extra $6 per month on a $200,000 30 year loan can save you 4 payments!
- As a mortgage expert at Dominion Lending Centres I often explain that making mortgage payments each week or bi-weekly will lower your interest paid over the term of your mortgage and may even total the same amount of money as a month’s payment at the end of the year. Paying your mortgage in this way can take your mortgage from 25 years down to approximately 21.
- While we all like getting raises – and spending the money from our raises on commodities, you could put that extra income into your mortgage and the best of all? You won’t need to change your spending habits!