While people are usually on the fence when it comes to whether or not they should pay off their mortgage early, well, we don’t claim to take sides either. What we’ll do instead, is provide you with 3 ways you may seek to pay off your mortgage early here in Singapore.
Ultimately, it all boils down to whether you have the financial capability to pay off your mortgage early. After all, the savings on interest accumulated over the years can be a significant amount that can be put to better use elsewhere. Furthermore, isn’t being mortgage-free is a dream most of us hope to achieve someday, better yet, in a nearer future?
Putting in a larger sum of initial down payment
The absolute first step, if you have the financial means to, is to put in a large sum of initial down payment for your property. This is great for those who have managed to scrimp and save a significant amount of money from the day they started working, or are born with a silver spoon (yes, life isn’t all fair). Though seemingly painful to throw in a huge amount of money into a property at one shot, doing so reduces the amount of mortgage you need to take on. In turn, you pay a significantly lesser amount of interest than you otherwise might need to.
Shortening your loan tenure
With the above in mind, it is now possible to take on a shorter loan tenure. So if you are the kind that seeks to be free from the shackles of debt early on in your life, and of course, you also have the financial capability to do so, you can choose a shorter loan period. Once again, you not only save on the amount of interest you might otherwise have to pay off, you also take lesser time to pay off your home loan, and will then be able to focus your funds on the other joys of life.
Paying extra each month
What is the simplest way of paying off your mortgage early? Well this is it – by simply paying extra each month! If you’re able to really keep track of your monthly expenditure, it’d be a good way of reviewing where you could cut down on unnecessary spending and inject money from there into extra payments on your mortgage instead. If you’re only able to shave $80 off your monthly splurges, don’t worry because the same rule applies – anything is better than nothing at all. If you think about it, consistently adding $80 extra a month to your mortgage can make a huge difference in the long run.