If you incorporate a few of these little tools, you will be able to reduce the number of years it takes you to pay off your mortgage.
- Instead of monthly mortgage payment, pay your mortgage every other week or on the 1st and 15th of each month
- Contribute any annual bonus to your mortgage
- Consider taking a variable rate mortgage but pay the fixed mortgage rate. For illustration purposes only, if your variable payment is $2,300 each month and payment for the fixed rate mortgage is $2,700, take out the variable rate mortgage and pay $2,700 per month. This way more money will be going toward your principal each month. If you take out the fixed rate mortgage and pay $2,700, you are paying additional interest fees that simply make the bank rich.
- Round up your mortgage payments so for example if your payment is really $1,073, round your payment up to $1,100 or $1,150 each payment. It will be easier to calculate your budget and you’ll pay down your principal faster.
- Create an Income Suite in your basement so that you can apply the rent to your mortgage.