Pay off your mortgage faster
Friday August 22, 2008
Unless you are on a restricted fixed interest rate mortgage, it is likely that the mortgage company you are with will be happy to let you pay off your mortgage as quickly as possible. Paying off your mortgage faster means that you will pay less in interest in the long run, as interest is determined by the amount you must still repay. You can pay off your mortgage faster even without having to spend more. You just need to learn how to use a credit card in the right way.
One of the best kinds of credit cards to use for this technique is a cash back credit card as you can use the money you earn to pay off the annual fee. Many cash back credit cards will also feature discounts, such as the BP Citibank MasterCard that offers discounts on fuel. Nevertheless, the most important feature that your credit card must have is a reasonable number of interest free day son purchases, and your home loan must have a redraw facility.
Do all of your usual spending or the month with your credit card and the entirety of your income go towards your home loan. Before the interest free period expires, redraw from your mortgage to pay off your credit card. Interest on mortgages is often determined on a daily basis, so by keeping as much of your money in your mortgage as possible at any one time you can reduce the amount of interest that accumulates. Over the life of a loan, this can lead to incredible savings. It is important that you are careful to avoid interest on your credit card, however, as credit card interest rates are often higher than those on home loans.
Please visit our comparison page if you would like to compare home loans and mortgages or browse our site to read about a specific mortgage company in our mortgage company profiles or to find mortgage tips to help you deal with your mortgage company.
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