When you are setting your financial and lifestyle goals, paying off your mortgage is likely to be at or near the top of the list.\u00a0 So, it\u2019s reasonable to start thinking about whether you could overpay slightly every month in order to pay it off more quickly.\u00a0 But there are many variables to consider beforehand to be sure it\u2019s the right decision for you.<\/p>\n
Firstly, does this approach help or hinder your wider financial plan and fit in with your goals?<\/p>\n
Your mortgage is just one single element of a much bigger financial picture, so overpaying may not be the best use of the funds you have available.\u00a0 For example, could investing this money be more lucrative? Could you use it to pay down debts with higher interest rates, such as credit card debt, and ultimately save more money in the long run?\u00a0 Could you be using this surplus money to create an emergency fund instead, so you have a financial safety net in case of unexpected events, such as a job loss or accidental damage to your home?<\/p>\n
If you are thinking about diverting extra funds to pay off your mortgage more quickly, it\u2019s really important to take a broad look at your finances, so you can be sure you are taking the right course of action.<\/p>\n
Another issue to consider is the terms of your mortgage agreement.\u00a0 Your lender might impose penalties for overpaying within a certain period of time or over a particular limit (this is usually 10%).\u00a0 You should therefore make sure you know exactly what your mortgage agreement states regarding overpayments, so you are aware of any potential penalties, and if the interest savings you could get from overpaying ultimately outweigh these costs.<\/p>\n
In the right circumstances, overpaying your mortgage can have many benefits.\u00a0 For example, you could lower how much interest will be charged if you can reduce your overall balance earlier on \u2013 which could add up to big savings over many years.\u00a0 And of course, paying off your mortgage early can bring you great peace of mind, and you can move forward without the burden of monthly payments and with the confidence that you own your property outright.<\/p>\n
But whether it is the right step for you depends on many different factors, from your current financial circumstances to your longer-term financial goals.\u00a0 A professional financial adviser can work with you to determine if overpaying your mortgage is appropriate, taking a holistic look at your finances to see if you could get better returns or use money more effectively elsewhere.<\/p>\n
If you have any questions about how best to manage your finances and work towards your goals, please don\u2019t hesitate to get in touch with us, and we\u2019ll be happy to speak with you.<\/p>\n","protected":false},"excerpt":{"rendered":"
When you are setting your financial and lifestyle goals, paying off your mortgage is likely to be at or near the top of the list.\u00a0 So, it\u2019s reasonable to start thinking about whether you could overpay slightly every month in order to pay it off more quickly.\u00a0 But there are many variables to consider beforehand to be sure it\u2019s the right decision for you. Firstly, does this approach help…<\/p>\n