December 14, 2016 nkad3

Tips for Paying off Your Mortgage Quicker

The goal of every home owner is to pay the banks back with the least amount of interest paid as possible. When it comes to paying off mortgage, there are several approaches’ you can take to decrease the time in which this is done:

Reduce the amortization

  • Reducing the amortization of the loan will naturally decrease the time it takes to pay off mortgage but in order to do so, your monthly payments will increase as a direct result of that reduction

Pre-payment privileges

  • Lump Sum
    • Many mortgages allow up to 20% to be repaid directly against the outstanding principal each year. This strategy helps home owners with paying off mortgage by applying one-time payments per year without a continuous obligation
  • Increased payment
    • In addition to the Lump Sum option, many mortgages also allow home owners to increase their regular monthly payment by a percentage of the monthly payment amount. This option establishes a new payment amount; where the difference between the new & old payments, is applied directly to reduce the outstanding principal. This option typically requires a continuous obligation to the increased payment amount.

Accelerated-Biweekly payments

  • Accelerated biweekly payments allows borrowers to make 2 additional “biweekly payments” each year which can translate into shaving off 3 years from your original amortization schedule


These are the vehicles of reducing the time it takes borrowers in paying off mortgage, but here are some other life tips that would help make these options easier to exercise:

  1. Apply your tax refunds to your mortgage via “Lump Sum option”
  2. Shift some of the equity from your investment portfolio, into your mortgage via “Lump Sum option”
    1. reducing the principal, decreased the interest paid on the remaining balance which translates into interest savings. This interest savings can be considered a gain depending on how you look at it. After all, paying off mortgage sooner is an investment in itself.
  3. With every bonus or pay raise that you get over time, apply the increase to your mortgage. Many people naturally adjust their lifestyles to the increase in pay. However, maintaining or reducing your dependency on your income for other things will free up cash flow for mortgage repayment.


If you would like to learn more on how paying off mortgage quicker can work for you, please contact us today!

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