First of all, most people’s mortgage debt is the cheapest form of borrowing they have. Car loans and credit cards are far more expensive. Therefore, there’s little point paying off your best value loan if you are still borrowing on credit cards or to buy your next car. Get your priorities right.
The flip side of this is that whilst a car loan might be over say 3 to 5 years, a mortgage term is usually 25 years or more. That means that in most cases someone that borrows £100,000 over 25 years will end up paying back about £175,000 in capital and interest over the term of the loan. Now that’s sobering.
Of course, the faster you pay off debt, the less interest you accrue which, in turn, makes it cheaper to pay off debt. More of your monthly payment is made up of capital repayments.
Here are a few ways to pay down your mortgage faster and reduce the amount of interest
you pay over the term of the loan;
For more information contact Mortgage Required to speak to a mortgage adviser today.
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