Set smaller targets
When you consider your mortgage in its entirety, it’s easy to feel overwhelmed about the enormity of your loan. Paying back your mortgage can feel daunting, even insurmountable, quickly leading to financial stress. Instead of fretting over the total amount, try breaking your mortgage down into bite-sized chunks or targets that are more manageable and achievable. Work towards reaching these milestones by mapping out a realistic repayment plan. In this way, reaching a short-term goal will provide you with satisfaction and keep you motivated to stay on track.
Pay extra each week
By focusing on incremental successes, you can quickly take control of your mortgage. What we mean by that is simply this: paying a little bit extra into your mortgage each week, even as little as $5-$10 a week – the cost of a cup of coffee twice a week – can make a difference to your mortgage. It’s not a huge sacrifice but it could shave years off your interest repayments and ultimately help you to repay your loan much faster.
Lump sum repayments
A lump sum repayment can make a significant difference to your mortgage. If you’re lucky enough to receive a bonus or commission, or you’re expecting a tax refund, consider paying it into your mortgage. Depending on the type of mortgage you have, you may even be able to redraw your additional funds should you need them later.
Do a review of your income and expenses
It’s important you review your financial situation at least once a year. If your situation or lifestyle has recently changed – you have a new job or a family – then now’s a good time to review your income and expenses.
Check that your existing mortgage still meets your needs and is competitive – both in terms of the interest rate you’re paying and the amount of flexibility you have in making additional repayments. If you’re not already using an offset account and credit card to manage your monthly cash flow, you may want to consider this effective way of reducing the interest on your mortgage.
Taking control of your mortgage not only saves you money in the long run, it also goes some way to relieving some of the mortgage stress you may be experiencing.
Need help taking control of your mortgage?
We’d like to help you plan your repayment strategy so that you can get debt-free faster. Talk to Best Mortgages about taking control of your mortgage and reducing your mortgage stress with an income and expense review of your situation.