By Michael Anastasiadis – Mortgage Broker Wellington
Wouldn’t it be lovely to pay off your mortgage years faster than you had initially planned….
Then reward yourself with more holidays, more fun times with family, less stress about weekly repayments.
This is a discussion I have with clients and potential clients often.
As a Mortgage Broker, I’m deeply invested in building good relationships with my clients; so helping them to pay off their mortgage is of great interest to both my clients, and myself.
Over time, I’ve developed a list of ideas that I give to clients, friends, anyone asking, as I look to use my knowledge to help more people.
As always, if you want to discuss any of these ideas, feel free to reach out. They are general ideas, not specific advice, so make sure you think through how these ideas apply to you.
- Ensure you get the right deal at the beginning. Work with your broker closely, ensure you ask lots of questions, and get the best possible deal. Obviously, I’m biased here because I’m a mortgage broker, but I can hand on heart say that more people are using brokers for this aspect – getting the right AND best deal on day one. The experience and knowledge and ability to shop around simply cannot be matched by your bank.
- Review your loan and keep talking to your broker or lender. I will typically contact you about 2 months out before your fixed rate is up for review. However, situations change, and often it is up to you to reach out and start conversations to ensure that you are getting the best deal based on new changes. A mortgage is not a “set and forget” type of deal.
- Extra repayments any time you can. Tax returns or spare cash influxes of any kind, are best put on your mortgage. The money you put on or save to bulk reduce your loan will generally save you that much again in interest… effectively doubling the impact of your extra repayment. Ensure that you are able to do this without penalty, talk to your broker. There is simply nothing better you can do with spare cash, than pay down your mortgage.
- Start repayments on day 1 of your ownership, not one month in. This will save you interest and get you off to a good start.
- Pay fees and charges upfront. Often these will be wrapped into your mortgage, and in that case, you’ll then be paying interest on those fees too. Pay them upfront if possible.
- Pay weekly or fortnightly, not monthly. Most people are aware that this will give you an extra payment per year, as there are 4.3 weeks in a month, not 4 weeks. Ensure you are doing this.
- Review your entire household budget. This can result in small savings here and there, that if added onto your mortgage, save you big money over time.
- Set up an offset facility if available. This means putting your salary or wages onto your mortgage to then draw out over the month. As interest is calculated daily, this idea works over the long term to save you a lot of interest.
- Have a spring cleanout, and put all the money you raise on your mortgage. This has a double effect of helping you minimise, understand the value of “stuff”, but more importantly as you sell things off, you put that money straight onto your mortgage and save on interest.
- Round Up. Whatever your mortgage repayment is calculated at, round it up to the nearest $50. It is highly unlikely you’ll notice the difference in your week to week spending or budget, but over time, this trick will save you thousands of dollars in interest.
I’d love to hear more ideas from you about how to save money and pay down your mortgage faster – pop any ideas here on my Facebook page: https://www.facebook.com/michaelmortgageadviser
If you need any help with your mortgage, just feel free to reach out. Hit this link, and I’ll get in touch. https://www.michaelmortgageman.co.nz/#contact
If you want to learn more about why you should use a Mortgage Broker, I’ve got this article here that will help: https://www.michaelmortgageman.co.nz/why-should-you-use-a-mortgage-broker/
Thanks for reading!
Michael Anastasiadis – Mortgage Broker Wellington