Today we have part 2 in our series of how to pay off your mortgage faster. If you caught us last time we were chatting about how to use your mortgage as a savings account. Today we’re going to chat about a graduated approach in case you’re worried about saving a huge lump sum of money and paying it into your mortgage. We’ve got a better option for you that will help you chip away at your mortgage without having to put too much effort into it.
With our mortgage we offer a free annual mortgage checkup service and through this we’ve found that with most of our clients have taken the regular monthly payment that their mortgage is setup with and haven’t really looked into the other options or made that switch.
One option that we really prefer is the biweekly accelerated payment, this is good not only because it is convenient and less stressful on your bank account (instead of one huge payment coming out of your bank account they split it into several smaller payments). The real benefit is:
- since you are splitting your mortgage payments you are actually prepaying part of your monthly amount several weeks in advance and you do not need to pay interest on that amount for the rest of the month
- since the payment is accelerated you are voluntarily paying a little more each month helping you to chip away at your mortgage. Your principal balance is going to decrease faster and at the end of your term you’ll notice the outstanding balance is significantly lower than had you remained on regular monthly payments.
If it’s confusing just give your mortgage broker a call otherwise we’ll catch you next time and have fun paying down your mortgage!
If you have any questions about this topic feel free to call us at 1-866-521-9557 or email at email@example.com.