With people settling down and buying houses later in life unfortunately that 30-year mortgage can start to creep into an age where you might want to be thinking about retiring. Some careful planners manage to pay off their mortgage in much less than the maximum term leaving them with enough funds to live a great lifestyle before and during retirement. Here are some things that can help you pay off your mortgage sooner.
Using an offset account
If you have a substantial amount of money sitting in a low-interest rate savings account or term deposits, it may be more effectively to put this money into an offset account. These accounts offset the amount of interest you are being charged on your mortgage by the amount of money in your account, which can be very advantageous if the interest rate on your mortgage is much higher than your savings account, and means that you can still withdraw the money if you need it in an emergency.
If you have a substantial amount of debt, including high-interest rate items such as credit cards or store cards, it can sometimes be useful to look at consolidating all of these debts into a single debt at a lower interest rate. Ideally, then you can throw all of the money that you have been paying towards debt repayment at this amount and you'll be able to pay off more of the principal due to paying off less interest.
Review your overall savings/investment plan
While you are looking to pay off your mortgage it can also be great to review your overall savings plan and budget with a financial adviser. You might have money that is being used for other payments that you can redirect into your mortgage, or ways to earn extra money such as taking on extra shifts at your job. You can also review other assets that you own with the adviser and make sure that you still want to hold on them, as you may find that you can sell off some assets and make some large one-off payments into your mortgage.
Making some sensible plans to pay off your mortgage early can let you enjoy a stress-free retirement with more available cash. Who know you might even be able to leave work earlier and spend some time pursuing other goals and hobbies. A financial advisor can help you to reach your goals.Share
28 March 2016
As the old saying goes, "you have to spend money to make money", and in this blog, I am going to help you see how and when that platitude applies. Hi, my name is Penny, and I love to write. My second favourite thing is to think and strategise about money and finance. In this blog, I am going to explain finance in ways that I hope are new and interesting to you. I studied accounting at uni but verged away from that to start my own consulting firm. I work from home, and I am bringing you this blog from my home office. Thank you for reading!