{"id":4595,"date":"2017-05-17T01:19:43","date_gmt":"2017-05-17T01:19:43","guid":{"rendered":"https:\/\/amazingproperty.com.ng\/blog\/how-to-top-up-your-mortgage-and-reduce-your-debt\/"},"modified":"2017-05-17T01:19:43","modified_gmt":"2017-05-17T01:19:43","slug":"how-to-top-up-your-mortgage-and-reduce-your-debt","status":"publish","type":"post","link":"https:\/\/amazingproperty.com.ng\/blog\/how-to-top-up-your-mortgage-and-reduce-your-debt\/","title":{"rendered":"How to top up your mortgage and reduce your debt"},"content":{"rendered":"

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\"couple\"<\/p>\n

Paying off more than your monthly repayment can save you thousands in the long-run. Picture: Getty<\/p>\n<\/div>\n

Imagine your mortgage<\/a> is a giant block of ice. The only way it shrinks is the slow drip, drip, drip of monthly repayments over the years. Now, envision using an ice pick to smash out a huge chunk.<\/strong><\/p>\n

This is the analogy used by John Tindall, a Choice Home Loans<\/a> mortgage broker in Wattle Grove, Sydney, to explain the power of topping up a mortgage; making extra payments, either regular or piecemeal, to pay it off quicker.<\/p>\n

\u201cWhere it\u2019s possible, making additional repayments reduces your debt faster, meaning you pay less interest and build your ownership of the property faster. It also builds up a \u2018buffer\u2019 of extra payments in case you miss one in the future,\u201d Tindall says.<\/p>\n

Small tweaks to how a mortgage is paid \u2013 like switching from monthly to fortnightly payments or paying an extra set amount each month on top of regular payments \u2013 can make a large and lasting difference.<\/p>\n

\u00a0<\/p>\n

\u201cFor those with a $400,000 mortgage, over 30 years, paying 4% interest, switching from monthly to fortnightly payments effectively adds another two payments into your year, which means you\u2019d save $45,000 in interest and pay the loan off four years and one month earlier,\u201d he says.<\/p>\n

Paying an extra $100 each month saves $30,000 in interest and cuts two years and eight months off the life of the loan, he adds. Even a minor, one-off payment of $500 each year can save $13,000 in interest and reduce the loan length by over a year.<\/p>\n

People should think of their mortgage when they have surplus funds<\/a>, Tindall says.<\/p>\n

\u201cSome people have a clear budget, with savings goals and dedicate surplus income to paying down the mortgage. Others may choose to use tax refunds, an inheritance or other windfalls to pay a chunk off the mortgage. Having set regular payments is easier and better discipline,\u201d he says.<\/p>\n

\u201cIf you added $2000 at tax time each year, for example, to that $400,000 mortgage, you\u2019d save $46,000 and cut four years and three months off your loan,\u201d Tindall explains.<\/p>\n

Using an online calculator is a great way to see how an additional few dollars a month can reduce the life of a loan dramatically.<\/p>\n

\u201cCouple this knowledge with an active plan, such as scheduled additional repayments and you\u2019re well on the way to smashing that loan down!\u201d<\/p>\n

This information is of a general nature and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances.<\/strong><\/em><\/p>\n

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Realestate.com.au <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

[ad_1] Paying off more than your monthly repayment can save you thousands in the long-run. Picture: … How to top up your mortgage and reduce your debt<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":4596,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_seo_schema_type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[4],"tags":[15236,3048,347,1329,408,1007,41,818],"class_list":["post-4595","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opportunities-in-new-markets","tag-calculator","tag-documents","tag-home-loan","tag-loan","tag-mortgage","tag-owners","tag-property","tag-real"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/05\/couple_documents_getty_article-1024x768.jpg?fit=1024%2C768&ssl=1","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":623,"url":"https:\/\/amazingproperty.com.ng\/blog\/mortgage-broker-versus-mortgage-lender-which-one-is-right-for-you\/","url_meta":{"origin":4595,"position":0},"title":"Mortgage Broker Versus Mortgage Lender: Which One Is Right for You?","author":"Amazing Property","date":"November 3, 2016","format":false,"excerpt":"Top real Estate Blogs in Nigeria : Mortgage Broker Versus Mortgage Lender: Which One Is Right for You? 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