Paying off a mortgage can take a long time, depending on which time period you have opted for. Regardless, it is a long enough period that there is the chance that your circumstances may have changed between when you signed the contract and your current state. Perhaps you have got a new job which means you have a higher salary and therefore can afford to pay off your mortgage sooner. So, what happens in the case that you want to pay off your mortgage early?
Paying off your mortgage early could be incredibly beneficial as it could save you money by saving on interest payments and increasing your monthly outgoings. If you feel that you are in the financial position to pay off your mortgage early, the good news is that you have options.
Firstly, you could opt to increase your monthly payments. With an increased salary, you may choose to pay a higher amount towards your mortgage, which is also known as an overpayment.
The second option for an overpayment is to pay it off as a one-off lump sum. We would advise you to check the terms of overpayment, as it may be the case that there is a limit on the amount you can overpay in a single year.
The final option is to shorten your mortgage term, because the shorter your term, the less interest you will pay in total. Though you will have higher monthly repayments, you will end up paying less overall.
The best advice we can give you is to get in touch with your lender to find out your options for paying for your mortgage early.
