Best way to Reduce Any Home Loan Quickly in 2020

Paying your mortgage early will save you money and take a financial burden off your shoulders. Here are some ways to get rid of your mortgage debt faster

Make extra payments

Additional repayments on your mortgage can reduce your loan by years. Putting your tax refund or bonus on your mortgage could save you thousands in interest.

In a typical 25-year principal and interest mortgage, most of your payments during the first five to eight years go toward paying interest. Therefore, any additional amount that you put in during that time will reduce the amount of interest you pay and shorten the life of your loan.

Find a lower interest rate

Find out what features of your current loan you want to keep and compare the interest rates of similar loans. If you find a better rate elsewhere, ask your current banker to match it or offer you a cheaper alternative.

Make higher refunds

Another way to carry out your mortgage is to make payments as if you had a loan with a higher interest rate. The extra money will help you pay off your mortgage sooner.

If you switch to a loan with a lower interest rate, keep making the same repayments that you had at the higher rate.

If interest rates go down, keep paying your mortgage at the highest rate (Apply Here for Low Interest Rate).

Consider a clearing account

An offsetting account is a savings or transaction account linked to your mortgage. The balance in your offsetting account reduces the amount you owe on your mortgage. This reduces the amount of interest you pay and helps you pay off your mortgage faster.

Avoid an interest-only loan

Paying both principal and interest is the best way to pay off your mortgage faster.

Most home loans are principal and interest loans. This means that repayments reduce the principal (amount borrowed) and cover the interest for the period.

With an interest-only loan, you only pay interest on the amount you borrowed. These loans are usually for a specified period (for example, five years).

Your principal is not reduced during the interest-only period. This means that your debt will not decrease and you will pay more interest.