Six Ways to Pay Down Your Mortgage Fast

Originally published in May 2010 by Camilla Cornell

The sooner you are able to wipe away weekly payments, the richer you’ll feel, so boogie down with and do the mortgage hustle.

1 Scrape together the biggest down payment you can manage If you can come up with a 20 percent down payment on your home to begin with, you can save on the amount of interest paid and avoid taking on a high-ratio mortgage.

2 Opt for a shorter amortization period Consider that, by paying a $200,000 mortgage loan off over 20 years instead of 25, you’ll save $23,670 in interest payments.

3 Count your pennies A payment increase of as little as $25 weekly ($100 monthly) will slash almost eight years off your 25-year amortization period on a $100,000 mortgage, saving you a hefty $10,600 in interest. Think about it—that’s just cutting out one week of Starbucks.

4 Reallocate some resources from an RESP If you’re mortgage-free by the time the kids are in school, you can redirect cash toward their education.

5 Make an anniversary payment Save the difference between what you can reasonably pay and what you are actually paying and plop it down on the anniversary date of your mortgage to pay it down faster.

6 Know when to back off It makes no sense to max out your mortgage payments at the risk of racking up credit card debt at astronomical rates of interest. Be wise.

For more tips on refinancing click here.

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