If you’re here right now, you might have asked: “how to pay off your mortgage in 7 years?” at one point or another to Google. Being free of your mortgage has a lot of tempting benefits, such as a more liberating lifestyle, peace of mind and increased equity. Well, you’ve come to the right place!
Here at Sunshine Coast Financial Solutions, we have access to a wide range of mortgage lenders to suit any sort of business or individual needs. In this blog, we’ll provide you with a comprehensive and educational step-by-step plan on how you can pay your mortgage within 7 years!
How To Pay Mortgage Off In 7 Years: Our Suggested Strategy
Assess Your Current Financial Situation
First, you need to review your current financial situation. This will give you a better idea of where your current finances are going.
- Calculate your total mortgage debt: A good place to start is to calculate your total loan – your principal, interest and outstanding fees.
- Review your income and expenses: Make a detailed list of your expenses and budget so you can track where your money is going.
- Cut your costs: Identify the areas where you can cut your costs or even expenses that you can completely discontinue so that you can lessen your expenses.
- Implement and track your budget: Execute your new budget with the help of the budget tool. This will help you review your finances and expenses much more easily and more regularly.
Make Extra Repayments
One way that you can ensure your property loan is sooner paid off is to make extra repayments. It’s not rocket science; if your bank allows it, you can increase the amount you pay each month.
- Increase the frequency of your payments: From monthly, you can switch the frequency of your payments. You can opt for fortnightly or even weekly repayments.
- Make lump sum payments: Reduce your monthly principal by using your work bonuses, tax refunds and even inheritance money for lump sum payments.
- Rounded-up repayments: Add small increases to the amount you use for payments. Over time, these can increase and make a significant difference.
- Maintain your repayments: Keep your payments consistent, even if the interest rates may change; consistency helps speed up repayment.
Explore Mortgage Reduction
If you’re looking for the answer to “how can I pay off my mortgage in 7 years?”, your next strategy is to explore this loan’s reduction options.
Some options we suggest include:
- Offset accounts: An offset account functions as a transaction account that holds your money and reduces the interest you pay on your mortgage loan. As a result, you obtain less interest accrued on your loan. This could also lessen the term of your loan.
- Refinance to a lower interest rate: With a shorter loan term and less total debt you will pay less in interest and even have the bandwidth to put your money into other endeavours such as savings, investments and other financial goals.
- Save for a bigger deposit: A bigger deposit at the start of your mortgage will lower your loan balance and prevent you from paying the Lender’s Mortgage Insurance (LMI); the latter is a requirement for a deposit less than 20% of your property value. Borrowers who contribute at least 20% of the property value as safer prospects.
Increase Your Income
In addition, you may want to consider increasing your income source so you can add more to your repayments.
- Get a side hustle: If you have other skills and interests, monetise them so you can have extra income.
- Ask for a raise or promotion: If you are experienced, skilled and ready enough for more responsibilities or achieved enough to warrant a promotion, talk to your supervisor and management about a possible raise or promotion.
- Upskill or reskill: Seeking higher pay at work? You can upskill by learning more skills or even shift to a higher-paying industry by reskilling.
- Look for a higher-paying day job: In the event that your workplace will not grant you a raise or promo, consider applying to another workplace that offers higher pay.
- Invest wisely: Invest in assets that help generate passive income like rental properties or dividend stocks.
Get Expert Home Loan Advice With SCF
We hope that with this blog we’ve answered the question of “How can I pay off my mortgage in 7 years?” well especially for those of you who are first home buyers. Take note that paying your mortgage can also be heavily dependent on personal circumstances like income, current debt levels, and willingness to make significant lifestyle changes.
For more help and expert advice in seeking expert mortgage advice, Sunshine Coast Financial Solutions is here to help with all your home loan needs, including home buying, investing and refinancing. Contact us today!
Meet Chris Wilson, the heart of Sunshine Coast Financial Solutions (SCFS). With over a decade of experience in finance, Chris started his journey as a broker with Aussie Home Loans in 2009. His dedication earned him the title of Rookie of the Year in 2010. By 2011, he was ready to build a business based on trust and strong partnerships.
