If you are able to reduce your mortgage debt you will save on future interest payments. The earlier you pay off your mortgage, the sooner you will be able to focus on increasing your other investments and savings.
These are some of the best way to reduce mortgage debt
- Lumpsum Payments.
By making lump sum payments you can help to pay off your mortgage early. This table shows how different amounts of lumpsum payments can result in paying off your mortgage earlier. Making extra mortgage payments
- Make Extra Payments Early
The earlier that you make the extra payments in your mortgage term, the earlier your mortgage will be paid off. This is because when you make extra payments you reduce the mortgage capital and also the 30 years of compound interest on that particular debt. If you make extra repayments towards the end of your mortgage term, you will save correspondingly less interest payments
- Flexible Mortgage.
If you wish to make a lumpsum payment it is important to have a mortgage option that enables flexible payments. The advantage of a flexible mortgage is that if you make overpayments then, should difficulties arise, you will be able to take a temporary payment holiday. With this facility it is important to maintain the discipline of making extra payments to reduce your mortgage debt. – Flexible Mortgages
- Increasing your Monthly mortgage repayments.
Increasing your mortgage payments by only £50 a month will have a big impact on reducing your mortgage debt. This is because the extra payments will go to reducing the outstanding mortgage debt and does not go on interest payments. This table shows how much quicker you can pay off your mortgage debt. Should I pay extra mortgage payments?
- Current Account Mortgage
A current account mortgage makes it very easy to automatically offset your mortgage debt. What happens is that if you have £3,000 in your current account, this is used to automatically reduce your mortgage debt and therefore, reduce your mortgage payments. This is the most effective way for reducing your monthly mortgage payments rather than outstanding debt.