How to Pay Off Your Home Mortgage Fast

If you’re like most people, your income stretches only far enough to pay the minimum payment on your home mortgage each month. There are other bills to pay and other expenses to think about all coming out of your income already. Trying to pay a little extra to reduce your mortgage faster often doesn’t fit into the budget and so it gets left out.

However, there are some ways you can reduce your mortgage quickly without trying to break the budget. Here’s how:

Reduce Costs

When most people think about reducing costs, they immediately think about cutting back on a cup of coffee or switching off a couple of light bulbs occasionally. These things don’t really add up where it counts though.

Think about your biggest expenses each month. In most cases, these will be credit card repayments, insurance premiums, cell phone costs and Internet costs.

These expenses eat far more out of your disposable income than a simple cup of coffee or a magazine. Work on ways to reduce these.

Negotiate with your current creditors for better rates. If they won’t negotiate, take your business to a provider or company offering a much better deal. This will help to reduce your costs each month and make it easier for you to stretch your income a little further.

Round Up Your Monthly Mortgage Payments

If you’re paying $878 per month on your mortgage payment, round up your payment to $880. You won’t miss that $2 per month, but such a small amount of money can have a big impact on the amount of interest you pay over the term of a mortgage.

You might have managed to reduce your costs for other expenses, so if you can round your payment up to the nearest $100, you'll be repaying your mortgage even faster again.

Call your bank or home loan lender and see if they’ll set up a direct debit payment for the new monthly payment you want to make.

Paying your mortgage payment bi-weekly can seriously reduce how long it takes you to pay off your home loan. If you work out your repayments the right way, you could cut a little more than 6 years off the end of a 30 year mortgage and save potentially tens of thousands of dollars in interest payments.

The key to getting bi-weekly payments right is to take your regular monthly mortgage payment and divide it in half. Don’t do anything fancy or tricky or think about extra weeks in a year. Keep it simple and divide your regular monthly payment in half.

Then you pay that new, smaller amount on the same day every second week. This doesn’t mean you make your payment twice a month on the 1^st or the 15^th. It means making your payment every second Thursday, or every second Friday, or whatever day works for you.

You can see how bi-weekly payments really work here: How Bi-Weekly Payments Can Reduce Your Home Mortgage Fast

Some banks will try to tell you that they don’t accept bi-weekly, or fortnightly, payments. Yet it’s really easy for them to set up at their end. Persist and nag your bank’s representative until they allow you to switch to bi-weekly payments.

You can also have your bank set up a direct debit arrangement for you so they’ll deduct your repayment automatically from your regular account. This will stop you from forgetting to pay your bill that week.

Continue to pay even a little extra with each payment you make, and make your mortgage payments bi-weekly. You'll soon notice you're cutting a dent in your home loan balance much faster than you thought.