How to really pay off your mortgage early - Mortgages - News - Moneyfacts

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How to really pay off your mortgage early

How to really pay off your mortgage early

Category: Mortgages

Updated: 04/04/2011
First Published: 20/06/2007

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Do you ever have that sinking feeling when it comes to your mortgage payments, finding it increasingly harder to meet them each and every month? The good news is that you really can pay off your mortgage early and stop worrying. For an average mortgage of £130,000 for example, a £98 overpayment each and every month will shave 5 years off your mortgage term and save you over £22,000 in interest alone. Here's how:

Pay off your mortgage early by making more money:

It sounds far-fetched, but you really can make hundreds of pounds without much effort at all!

  • Use the Internet – sell all your old CDs, DVDs and electricals on eBay or Amazon. Make £2 - £5 each
  • For all your other unwanted goods, why not pack them up and sell them at a car boot sale? Make £100+ for 3 hours work!
  • Rent and see the gains! If you had a spare room you can rent it out for £4,250 a year, or £354 a month without having to pay tax on it. You could also rent your attic or basement as storage space, or maybe even your driveway as a parking space? Make £220+
  • If you have old mobile phones, computers and laptops you're due to throw out, recycle them instead. You can get cash for your old mobiles at Envirophone.comMake £30+
  • Make sure you get all the benefits that you are entitled to. From paying too much tax to housing benefit, child benefit and working tax credits, you could have the right to claim. Check out Entitledto.co.uk to see just how much you could be in for.

Estimated monthly makings – £400+

Pay off your mortgage early by saving more money:

You really can make considerable savings every month if you do the following at least once a year:

  • Utility companies rely on customer laziness. By switching gas and electricity suppliers you really can save a fortune. Save £60+
  • Mobile phone contracts can be the biggest killers. Review your average spends and switch to a tariff to suit. Alternatively, why not ditch the contract altogether and go Pay As You Go? Save £30+
  • If you have an outstanding credit card debt, you should switch to a 0% balance transfer credit card and start paying it off. However, it is crucial you don't make any purchases on this card. For a £1,000 balance, save £14+
  • Go through your bank accounts with a fine-toothed comb, and make sure you cancel any unnecessary direct debits such as the gym membership you never use. Save £50+
  • Do you really watch all those Sky channels? Why not go freeview instead? Save £35+
  • Same goes for broadband, switch to a lower bandwidth or a different provider and see the difference. Save £20+
  • Review all your insurance cover and cancel anything you don't need and reassess where you may be overinsured. Save £20+
  • Review Payment Protection Insurance (PPI) and Private Medical Insurance (PMI) too, and ditch it if it's not worth it. Save £40+
  • Check that your home is in the correct council tax band – you really could be paying too. Save £30+

Estimated monthly savings - £300+

As you can see, it's easy to make around £100 each month to put towards overpaying your mortgage. For any extra money you make, make sure you stash it away in a mini cash ISA to earn tax-free interest.

What to do next to pay off your mortgage early:

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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