5 Ways To Help Repay Your Mortgage Early

In some of my recent posts I’ve been discussing the benefits you can achieve by overpaying your mortgage. Below I’ve put together 5 simple yet practical ways that will help you repay your mortgage early, saving you thousands in the process.

1. Re-mortgage to ensure you are on the best deal

Many many millions of pounds/dollars are wasted each year by home owners simply being lazy and not switching to the best available mortgage deal. Mortgage providers continue to make millions from lazy home homeowners that do not re-mortgage when their discounted or adjustable rate mortgages move out of their teaser rate period and back to the lenders standard variable rate.

To many people are scared off by the re-mortgaging process, fearing it as a complicated and painful process. While it can take a few weeks for the process to be completed it should actually be viewed as a way for you to easily save thousands of pounds. If you are serious about wanting to repay your mortgage early then you really should check to make sure you on the best possible deal.

2. Make yourself a financial budget

In order to repay your mortgage early you need to make regular, consistent over payments on your mortgage loan. To do so, and to ensure you can afford the extra money to overpay your mortgage we recommend you make yourself a financial budget.

To start you need to start tracking every penny you spend. Carry around a notebook for a month and jot down what you spend your money on. At the end of the month try and categorize all of you spending into categories such as: eating out, smoking, utilities, socializing, clothes, misc shopping, travel etc.

Once you can see where your money is going each month you simply need to identify areas where you can reduce your expenditure.  Then simply alter your budget so that rather than spending £50 per month in Starbucks on triple venti cappuccinos, spend £50 overpaying your mortgage.

Once you start this process you’ll probably soon start to question much more the things you spend you money on. Do you really need to take that cab home from the office instead of waiting for the bus? Wouldn’t your wife prefer a nice (an more importantly cheaper!) home cooked meal instead of meal out? The point is that once you start trying it is not hard to accumulate an extra £100 or so per month that can be used for over payments as opposed to being frittered away on non essentials. As we have seen an extra £100 per month can make a huge difference.

3. Rent a room to help pay your mortgage

One great way to raise some extra cash is to start renting out a room in your house to bring in some extra income. Not only will taking in a lodger bring in extra money but it may be tax beneficial too.

Here in the UK for example the governments “Rent A Room scheme” means you can rent a room and earn up to £4,250 a year tax-free (i.e. you pay no tax on these earnings). As well as being able to divert the rental income toward overpaying your mortgage you’ll also have a house mate to help contribute toward the utility bills, saving you even more money.

4. Consider trading down the property ladder

Where do you want to be in 10 years time? Do you want to still be living in town? Wouldn’t you want to be living a little further out, somewhere nicer to bring up a family? Maybe in 10 years you won’t need such a big house as the kids have left home?

Most people tend to move house as a response to a change in their circumstances such as having a child. Well why not try and preempt such a move and move now? Doing so may mean you end up moving to a cheaper house with a smaller mortgage.

If living mortgage free is you ultimate goal then why not sacrifice a little on the house you live in? Think about it – when you are mortgage free you won’t have to work 9-5 just to pay the mortgage anymore. Gaining a better work life balance may well be worth taking a step down the property ladder.

5. Earn some extra money on-line

An increasingly popular way to earn extra income these days is to start making money on-line. To prove a point this blog helps me earn extra income that funnily enough is going toward over payments on my mortgage! I run a variety of websites and blogs that bring in additional income for me.

You won’t have to Google making money online for long before you realize that there are literally a million and one ways to make money online. The best way to get started is to take a program such as this that will give you a precise blueprint to follow.