15 tips to pay off your mortgage faster

Video Breakdown

0:00 – Introduction

0:44 – Do not borrow extra funds

1:00 – Reduce your mortgage term

1:29 – Offset mortgage

2:04 – Settle your mortgage if you have saving

2:22 – Pay your mortgage with your bonus

2:38 – Overpay your mortgage

3:05 – Reduce expenses

3:49 – Use your payrise wisely

4:11 – Stop paying SVR

4:35 – Avoid Interest-only mortgage

5:00 – Mix and match your deals

5:37 – Avoid long-term deals

5:55 – Get the best advice

Video Transcript

Introduction

Speaker: The interest rates have been really high this year. Today, I’m going to share 15 tips to help you pay off your mortgage faster and reduce the interest you pay.

Tip 1: Get the Best Deal in the Market

Paying less interest means more money can go toward reducing your mortgage. Always look for the best available mortgage deal.

Tip 2: Don’t Borrow Extra Funds

Avoid borrowing extra money after your mortgage deal ends. This will extend your mortgage term and increase total interest paid.

Tip 3: Reduce Your Mortgage Term

Long mortgage terms (30–35 years) may reduce monthly payments but increase total interest and delay full repayment. Reduce the term as much as possible.

Tip 4: Use an Offset Mortgage

An offset mortgage links your mortgage to a savings account. Any money in the account reduces the mortgage balance, lowering the interest you pay.

Tip 5: Use Your Savings to Pay Off the Mortgage

Instead of keeping savings idle, use them to pay down your mortgage, which will reduce interest and shorten the term.

Tip 6: Use Bonuses to Reduce Your Mortgage

If you receive a year-end bonus, consider using it to settle part of your mortgage. This helps reduce the mortgage faster.

Tip 7: Make Annual Overpayments

Banks often allow up to 10% overpayment per year without penalty. Even small monthly overpayments (e.g., £200–£300) reduce balances and interest.

Tip 8: Cut Down on Expenses

Reduce unnecessary expenses, particularly entertainment or duplicate spending, and use the saved money to pay off your mortgage faster.

Tip 9: Reduce Mortgage Term with Every Remortgage

Each time you remortgage, shorten your mortgage term by at least one year. For example, reduce a 30-year mortgage to 29 or 28 years if affordable.

Tip 10: Use Pay Rises Wisely

Instead of increasing lifestyle spending after a pay rise, apply extra income toward your mortgage to pay it off faster.

Tip 11: Avoid Paying Standard Variable Rate (SVR)

After your mortgage deal ends, switch from SVR to a new deal. Paying SVR unnecessarily wastes money that could reduce your mortgage.

Tip 12: Avoid Interest-Only Mortgages

Interest-only mortgages do not reduce the principal, meaning more total interest is paid. Repay principal wherever possible.

Tip 13: Mix and Match Deals

If you have multiple mortgages:

Compare interest rates and equity
Consider moving equity to reduce interest on higher-rate deals

This can free up money to pay down mortgages faster.

Tip 14: Avoid Longer-Term Deals

Long-term deals often cost more in interest. If possible, opt for shorter-term deals or use extra funds to pay off the mortgage sooner.

Tip 15: Get the Best Advice

A good mortgage advisor can help:

Apply all the tips above
Offer personalized strategies to reduce interest and pay off your mortgage faster

Conclusion

Speaker: I hope these tips are useful and you can implement some of them in your day-to-day life.

You’re watching WIS Mortgages, Accountancy & Insurance, live from the Paradise Island of Sri Lanka.

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