Top Tips To Paying Off Your Mortgage Sooner

1. Understand your budget!

The key to any level of financial success is to understand where and when you are spending your money.  Understand what costs are fixed and which ones are variable.

2. Set realistic targets

Set yourself set targets and ask your mortgage broker to give you a repayment schedule so you can track how you are going.

3. Prepare for higher interest rates

One of the biggest mistakes people make with their mortgage is to just make the minimum repayment and rejoice when interest rates and their repayments decrease.  Understand what you can afford and set your repayment level.  This way you will pay extra off your mortgage when rates are low and will have the ability to keep your repayments the same when rates are high as you will be ahead on your repayments.

4. Should I put money into super instead?

For some people focusing on paying off the mortgage will actually leave them financially worse of in retirement.  Putting greater focus on your superannuation may actually be more beneficial and actually make it easier to pay off your mortgage in the long term. Make sure you get the right advice particularly if you are planning on paying off your mortgage when you get access to your superannuation.

5. Protect tax deductions

For some people rather than paying off the mortgage you may be better off getting a mortgage with 100% Offset Facility and putting all of your spare cash into this account rather than the actual loan account.  Benefits are the same as paying the money off the mortgage but if the property is or becomes an investment property you may be in a position to claim a larger tax deduction.

6. Deal or no deal

Make sure you regularly check the rate and fees on your mortgage.  Most mortgages are out of date after an average of 5 years.  Never be complacent and shop around.  Using a mortgage broker will give you access to a depth of experience and a wide range of lenders and products.

7. Always have an exit strategy

Finally understand how you are going to pay off your mortgage!  Are you going to sell the property and downsize, earn enough to pay it off or have you overstretched yourself.  Borrowing well within your limits will always set you in good stead and remember in most cases lenders will often be prepared to let you borrow more than you can comfortably pay back.