Owning your home free and clear of a mortgage is a great feeling. If becoming mortgage-free faster is one of your primary financial goals, here are some strategies to help you get there.
- Make a larger down payment. Don’t borrow as much money to begin with, and you’ll have your mortgage paid off sooner.
- Increase your payment frequency. Make mortgage payments weekly or bi-weekly and pay more toward your principal. You’ll save thousands of dollars in interest and shorten the amount of time it takes to pay off your mortgage.
- Increase your payment amount. If your mortgage has an option to increase your payment amount, and you can afford it, boost your payments a little.
- Make lump sum payments. If you have an open mortgage, you can pay money toward your principal any time. If you have a closed mortgage, you may have the option to make annual lump sum payments. You can also make a lump sum payment when your mortgage term comes up for renewal, before your new term comes into effect.
- Choose a shorter amortization period. Decide how much you can afford each month. If you can afford higher mortgage payments, select a shorter amortization and save thousands of dollars in interest.
