Pay Off Mortgage Faster in Mississauga
Many people look to pay their mortgage faster in order to seek financial relief. If you’re keen on getting your mortgage paid quicker, there are various ways in which you can achieve this.
Many people may feel weighed down by their mortgages, and can’t wait for the day until it is paid off. Knowing that your home is finally yours can bring immense satisfaction and reduce stress. If you want to get your mortgage paid off as quickly as possible so you can get out of debt, there are ways to make this process go faster.
Choose the Best Interest Rate
When you are determining an interest rate, the choice is significant as the right interest rate will decide how much you will spend on top of your principal. As a general rule of thumb, the higher a percentage is, the more you will pay through your mortgage term. As we all have unique financial needs, it’s essential to opt for a mortgage that best suits your repayment plan.
What rates can you choose?
Mortgages are available in two different categories. The first is a fixed-rate mortgage, where your mortgage is locked for the entire duration. Individuals who decide on a fixed-rate mortgage are attracted to this option because you can easily navigate how much principal to pay back every month.
The second category is a variable-rate mortgage. With a variable-rate mortgage, you have the option of changing at any point in accordance with the market. However, when you have a lower interest rate, you can pay a higher amount on the principal. In other words, you can potentially pay off your mortgage much quicker.
Interest rates are separate for varying mortgaging, depending on their offerings. For instance, if there are cash-back incentives, then you could be paying a higher interest. However, there’s a portion of your mortgage that you can get back in cash for potential investments or home updates. These mortgage types can be attractive but are not available at individual financial institutions.
How to Pay Your Mortgage Faster
There are various ways you can pay off your mortgage faster. At sMp Mortgages, we want to help you achieve your financial goals, so here are some of our best tips.
Make Your Amortization Period Shorter
If you aren’t familiar with amortization periods, they are the amount of time needed to pay the mortgage off, interest included. When the amortization period is shorter, there is less interest to be paid throughout the mortgage.
If you’re unsure how you can limit this period, the process is simple: increase the number of your monthly payments. Even if you end up paying more each month, your mortgage will be paid off much faster.
Pay Big During Renewal
When your mortgage renewal period approaches, make a large payment. At this time, you can pay however much you want, so pay as much as possible.
Switch Your Payment Schedule
There are various types of payment schedules for your mortgage. If you choose a different one, like a weekly one, for instance, you’ll have more mortgage payments each year, including one extra monthly one.
If you decide that a biweekly schedule is more feasible for you, then you’ll be making more payments then if you paid monthly, as well as one extra monthly payment every year.
Make a More Significant Mortgage Payment
When you add to your regular mortgage payment, a substantial sum will be taken off your principal. The best approach is to select a higher fee as you organize your mortgage, or throughout any period during the term. As a result, you can pay your principal off quicker.
Make Yearly Lump-Sum Payments
If you add another payment to your mortgage in addition to what you already pay, then it can go towards your outstanding principal. That means that you will no longer owe any interest. Ask your qualified mortgage specialists, like the ones at sMp Mortgages, what amount would be appropriate to pay each year. When you pay these amounts each year, you will end up saving over time.
Is paying off your mortgage better than investing?
Paying off your mortgage and investing both have many financial benefits. For investing, you can acquire funds to make lump-sum payments. One popular example is a tax-free savings account. If you invest money by adding a significant lump-sum as your investment grows, this could be an excellent way to have financial security.
You can also analyze the rates for your mortgage or any potential investment and see which one would be more successful. If your prospective investment has a higher return, then secure it as an investment and see how it develops. If this is not the case, then a lump sum to pay off your mortgage faster would be your best bet.
If you are unsure how to navigate the world of mortgages or investments, the team at sMp Mortgage would be happy to assist you. Give us a call today at 1-844-MY-PLAN, email us at firstname.lastname@example.org or fill out the contact form on our website.