If you are wondering if you should start invest your money in paying down your mortgage faster, now is the best time. With low historical mortgage rates and talk of an future increases in mortgage rates, now is the best time to start investing money into your mortgage and start down your mortgage faster in the next few years. Here are some ways you can pay off your mortgage faster.
Breaking your Mortgage if you find a Lower Interest Rate
If interest rates dropped since getting your mortgage a few years ago, but you are on a fixed term, find out what the penalty would be to break your mortgage and calculate the savings on reapplying for a lower interest rate. You may potentially save thousands of dollars over the next few years and could lock in to a much better rate. If you have questions about your mortgage and mortgage rates, speak to one of the Mortgage Brokers at CompareMyRates. Use our Mortgage Renewal Calculator to find out how much you can potentially save with a lower mortgage rate.
If you about to get your mortgage renewed, according to the CAAMP Fall Consumer Report statistics, interest rates will be lower for those renewing their mortgage in the next 2 years. If you find a lower mortgage interest rate don’t lower your mortgage payments, keep the same payments or pay more if can afford higher payments and start paying down your mortgage faster. Start shopping early for best mortgage rates.
Change from Regular Payments to Accelerated Payments
Changing from regular bi-weekly or weekly to accelerated bi-weekly or accelerated weekly payments can save money over the life of your mortgage. When you select an accelerated weekly or bi-weekly payment option, you are essentially making the equivalent of one additional monthly payment each year which will help pay off your mortgage faster. For example take a monthly mortgage payment of $2000 and you changed to weekly, you would pay $461.54/week (2000*12/52). If you changed to accelerated weekly, you would pay $500 per week (2000/4). Use our Mortgage Payment Calculator to find out how much you can potentially save if you accelerate your payments.
Put extra money you have into your Mortgage
If during the year you have received extra money, save it and make a lump sum payment each year. If you have a closed mortgage, most financial institutions allow you to put extra cash towards your mortgage principal without incurring charges.