Any tips to help pay off a mortgage early?
@butterflygirl (498)
July 30, 2007 2:37am CST
Does anyone have any tips or advice to give on how to pay off a mortgage early? With rising house prices and most first time buyers having to take on huge mortgages I thought it might be nice to try and collect some useful ideas - whether it's ways to quickly bring down your mortgage, ways to earn more money, or just money saving tips (so that the extra money can be put towards the mortgage) i'd love to hear your ideas.
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1 response
@Eskimo (2315)
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30 Jul 07
I think a lot depends on how careful your are with money, If you are able to control how you spend, then the best kind of mortgage is probably an offset one (although the interest rate is usually slightly higher).
How it works is that your cheque account (and possibly savings accounts) are linked in with your mortgage, so that any money you have in your cheque account is tied in with the mortgage, say your mortgage is £300 / month and you have £2000 paid in as salary each month, any interest earned on the salary is deducted from your mortgage interest until you withdraw the money to pay bills etc. The interest earned is equivalent to the interest rate that you pay for your mortgage, also as you don't actually get any interest then you don't pay tax on it. This usually allows you to pay extra to reduce your mortgage as well.
I'm not sure how worthwile this is if you don't earn a great deal, you would need to sit down with a calculator and work out your own figures yourself.
@butterflygirl (498)
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31 Jul 07
Thanks for the advice. I think were tied in to our current deal for a few more years but i'll definately look into this for the future.