Everyone dreams of being mortgage free a few years earlier than scheduled, but few of us ever do anything about it other than dream of a big windfall or a win.
The truth is that huge inheritances and lottery wins are rare, sadly, so most of us keep paying the same old amount, month after month. Not many of us think of how making small overpayments every month can make a big difference over the years.
Here’s four easy ways to chip away at your mortgage so it’s over a little early.
Just add an extra tenner every month
Assuming you have a mortgage of £200,000 over 20 years at 2.5%, if you pay an extra £10-15 each month, you could save £1,050 in interest over the lifetime of the mortgage and pay it off four or five months earlier. Think about it – £15 a month is a few lattes, right? If you can bump this overpayment up to £50 each month, that’s more than a year knocked off the end!
Use your annual bonus
OK, this is painful, and you don’t have to part with it every year, but if you make this most noble of sacrifices just once, you’ll have an impact. Assuming you take £5,000 home after your bonus is taxed, you’ll be mortgage-free eight months early! If it really hurts, keep half!
Borrow a dog
You’d be amazed how many dog-owners need someone to take out Rover when they’re working late, and if you can fit in an hour’s ramble, you can charge up to £10 per walkie! Your earnings go straight to the mortgage and you get your 10,000 steps a day!
Hold a regular yard sale
If you’re a fan of de-cluttering, then rather than taking stuff down to the dump, try holding a yard sale or put some of the higher-value items on eBay. If you raise a few hundred each year, and give up your bonus and make regular overpayments, you’ll be in clover anything up to two-and-a half years early.
