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6 ways you can shave years off your mortgage

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6 ways you can shave years off your mortgage

Mortgages are your biggest monthly outgoing. It would significantly boost your lifestyle if you did not have to pay this each month. There are ways to reduce your mortgage length; here are seven tips.

 

1. Make additional overpayments

This may sound obvious, but making additional payments can save you more in the long term. Every extra pound you add can reduce the interest you will pay and the mortgage’s length.

Making additional payments depends on your personal circumstances. Can you afford to do this? With the current cost of living crisis, finances are walloped by the present economic situation, and many feel that paying extra is not an option. 

Many lenders permit a certain amount of fixed payments annually, then apply an overpayment penalty. If so, ensure you continue to put money aside but in a savings account so that when you can make a lump sum, it is there to pay off your mortgage sooner. 

2. Get a lodger

Renting a furnished room in your house could add on thousands of euros to your income, making it able to help with your monthly mortgage payments.

You can pay off your mortgage faster if you pour the cash you make from a lodger into a mortgage overpayment.

3. Rent out your driveway

If having a lodger living with you sounds too daunting, then why not use your house to help pay your mortgage in another way – rent out your driveway?

With car parks now horrifically expensive, both commuters and tourists alike are searching for cheaper ways to park their cars before beginning their daily schedules. If you’re out for most of the day and your driveway is empty, then why rent it out to someone close by? Park On My Drive is one such website where you can advertise your parking space and make more money to pay off your mortgage, especially if you love close to a stadium, airport or the city centre!

Save your cash, and when your next remortgage pays off a lump sum. 

4. Use cashback credit cards and websites

Every day, people must spend money; that’s a given. So why not get something back for all the goods you buy? 

Cashback credit cards do precisely this – allowing you to earn a percentage of your everyday spending using the card. However, there is a slight caveat here: cashback credit cards are only helpful if you repay the balance in full each month. If you don’t, the interest is higher than the cashback offered, thus negating the point of using the card.

Furthermore, some websites only offer cashback if you book through their website and not other retailers, so check these out before making any purchases. You don’t have to sign up to get a credit card to use it; make sure you are putting your cashback savings aside to pay off your mortgage.

Any little you can make will help pay off your mortgage interest and save you years on the mortgage length.

5. Reduce your outgoing bills

People need to improve at ensuring they minimise their monthly outgoings. This is a way to free up extra pounds – it’s time to look at your household bills. 

Switching energy providers is a sure way you can save money. MoneyHub lists the cheapest energy suppliers that you can switch to, and if you take energy company’s duel fuel discounts (by buying both electricity and gas from them), you can save even more euros. 

MoneyHub has a great price comparison section to compare your weekly grocery shop and determine which is cheapest to buy from. Yes, it takes longer to check, but your savings could be substantial.

With your savings from your monthly outgoings, ensure you put them aside and are strict about not spending it!

6. Not spending your lump sums

Whether an annual bonus from work or inheritance, it’s tempting to splash the cash on something you’ve longed to do for ages. 

Go on that dream holiday, get the kitchen redone by a conservatory or get a newer, more expensive car.

Always remember that if you can place some of your windfalls aside to overpay your mortgage, you will save thousands of pounds in interest in the long term. 

All savings you make, whether from your weekly shop or additional income, should all be routed into paying off your mortgage. Paying a little now will eventually save you a lot more and bring you closer to finally living a mortgage-free life!

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[…] each month will eat away at any financial goals you seek to achieve – clearing existing debt, saving for a deposit for a first-time buy, or that summer […]

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