How to Free Yourself of a Mortgage
Repaying your mortgage can be a daunting prospect but rest assured, there are plenty of ways to lower your payments and live mortgage free – this is attainable and doesn’t have to be a pipedream, especially for first-time buyers. From renting out a spare room to simply overpaying your monthly mortgage payments, the team at www.OnlineMortgageAdvisor.co.uk have outlined how to go about becoming mortgage free, cost effectively.
Rent out a spare room
Why not consider earning an income from your home? If you’re able to, it’s worth utilising your spare room by taking in a lodger. Over time, you’ll be surprised how quickly the income will start to build up, which can be used as another potential revenue stream to overpay your mortgage. If you don’t fancy having someone living with you full-time, you could even think about renting a room or hosting your home for guests when you’re away through the likes of Airbnb and SpareRoom.
Overpay on your mortgage
Overpaying on your mortgage is a sure-fire way of becoming mortgage free quickly. You can just choose to increase your monthly direct debit by an affordable amount or pay off a lump sum, if that’s a viable option for you. By overpaying on your mortgage, you’ll save yourself money in interest as well as clearing your debt months, or even years earlier, depending on how much you pay off. But, before you start, it’s important to make sure you can afford the payments and whether there is a limit on how much you can overpay by, along with any potential associated fees, which can vary from one lender to the next.
Cut down on luxuries
If you’re wanting to live mortgage free, you usually must make some sacrifices on your spending, especially when it comes to unnecessary purchases. Cut down on the luxuries you can live without – consider skipping a holiday or have drinks at home rather than going out… the list is endless! Think about what you are willing to cut out in order to pay off your mortgage quicker and you could save hundreds, if not thousands of pounds that could then be put towards overpaying your mortgage.
Switch your mortgage lender
Another way to cut your mortgage repayments is to switch to a better mortgage deal, especially if you’re not being offered the cheapest rate. When taking out a mortgage, you must shop around to ensure that you’re getting the best deal initially – but deals are changing all the time. By swapping to another provider that offers a better deal, this might easily save you hundreds of pounds on your repayments each month, subsequently helping you pay off your mortgage quicker and become mortgage free faster.
Remortgage and lower your interest rate
In a nutshell, the lower your interest rate is, the quicker you’ll be mortgage free. This might seem obvious, but if you’re paying less interest overall, then you can afford to pay off more of the initial amount you borrowed from your mortgage provider, who might be willing to offer you a better rate now that you’ve built up some equity. By remortgaging onto a cheaper rate and keeping your repayments at the same price, you might potentially shave years off your mortgage and save hundreds, if not thousands of pounds, in interest.
Offset your savings
By choosing an offset mortgage, you put your savings into an account that is effectively tied to your mortgage. Then, the balance of the amount is deducted from your mortgage when interest is calculated which means the money you save in interest can be used to pay off your mortgage quicker. However, interest rates can be higher, and you won’t receive any interest on your savings, but you’ll have access to your savings if you need them, which is reassuring.