Two steps towards being mortgage free
Being mortgage free later in life is a big aim for many homeowners. Clearing your mortgage could mean lower overheads each month and more disposable income. Plus, it could save you a lot of money in interest payments over the years.
Being mortgage free may seem like a pipe dream, but with careful planning and lots of thrifty budgeting it may be possible to pay off your mortgage early if this is something that is on your bucket list. Here are some options to look at to get on top of your mortgage payments and get them cleared sooner than you may have thought.
Remember to check your lender’s terms and conditions and speak to them regarding early repayment charges.
1. Remortgage regularly
Whatever length deal you’re on make sure you know when it’s going to end and, if you are on a fixed rate, check out what other deals you could get on next with a low interest rate. When your fixed rate deal ends, you will most likely be put on the lender’s standard variable rate (SVR) which may mean that your monthly mortgage payments increase.
Speaking to a mortgage adviser could stop you searching through all of the lenders and deals available to you. Nottingham Mortgage Services advisers search over 60 lenders across the whole of the market to find the right deal for you. Remortgaging every time your deal comes to an end could potentially save you lots of interest payments if you are able to.
If you do remortgage and are able to find a deal with a lower interest rate, depending on your finances at the time, you may also be able to afford higher monthly repayments which would eventually mean that you would pay off your mortgage in a shorter time period. Make sure you consider all of the costs involved in remortgaging, and if these will be added to your mortgage, as it could mean you end up paying more over the longer term. Check out our guide on remortgaging costs to see whether it is financially beneficial for your circumstances.
2. Mortgage overpayments
An alternative or additional way to pay off more of your mortgage balance is by making overpayments. This can either be by increasing your monthly payments or paying off a larger lump sum. This could be a windfall payment that you have come into or as little as £50 extra per month. Again, check whether you are able to make overpayments with your lender and whether there are any penalties for doing so.
If you are interested in making overpayments but wondering where you could find the extra money in your budget, check out our how to save fast article for ideas on where to cut back on daily treats and overspending. Read more about whether mortgage overpayments could be an option.
There we have several ideas that could allow you to reduce your mortgage balance – quicker! Remember to speak to an adviser from Nottingham Mortgage Services if you are interested in exploring your mortgage options and would like some professional advice.
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