More than ever, now is the best time for Aussies to start coming up with ways to achieving mortgage-free days, Yahoo Finance reports.
This movement is prompted by the increase in bank mortgage rates late last year and the shaky economic start to 2016. By getting ahead and paying off mortgage earlier, you will not only make savings but also get to the stage of financial freedom and get more opportunities by being able to invest in other assets.
With that in mind, Yahoo Finance suggests these five tips on how you can pay off your mortgage faster in 2016:
Find a better deal
Get rid of what no longer fits. If you have recently gone through major changes in your life especially financially, then maybe it is also time to reassess that mortgage loan. Find a better deal that matches your current situation. With a help of a broker, work on refinancing your loan to get better lender fees and mortgage rate applicable to your setup.
Pay more
By paying more, you get out of the mortgage pit faster. It does not have to be consistent, but rounding up to a full number, or just when you have funds to space, try to contribute a little extra - whether it's $10 or $100, it will help you reduce your mortgage.
Smaller payments more often
You can also reduce the size of your mortgage by making small yet frequent payments. Don't wait up a month and give yourself more chances of spending your money on less necessary things. Instead, choose to pay fortnightly or even weekly - you will find it easier on your pocket since you get to adjust your spending and won't find yourself paying a big amount in bulk at the end of every month.
Use an offset account
What a mortgage offset account does is calculate your monthly interest payable and deduct what it is in the offset account from your current loan. It is an account that you can link to your loan.
As a bonus, this account allows you to save on interest payable while still giving access to your savings.
Keep repayments steady
Don't be tempted to decrease your mortgage repayments when the interest rates fall.
You will pay more principle and make more progress on paying off your loan when you keep your repayments steady regardless if the rates go lower than your actual rate.