Planning & protection
Overpaying on your mortgage now could be the key to happiness in later years.
In Fairstone’s latest client survey, respondents were asked: “What financial tip/piece of advice would you give your younger self?”, interestingly the results show that mortgage overpayments was one of the most common themes.
A mortgage is a significant financial commitment, and often the largest debt you’ll ever take on. But did you know that by making overpayments on your mortgage, you could potentially save thousands in interest, pay off your mortgage sooner, and reduce financial stress?
One of the most significant benefits of overpaying on your mortgage is that you’ll pay it off more quickly. This means you’ll be debt-free sooner, and you’ll have more money to put towards other things.
The interest on your mortgage is the cost of borrowing money from the lender. When you overpay on your mortgage, you reduce the principal amount of the loan, which means you’ll pay less interest over time. This can result in significant savings, especially if you make regular overpayments.
Equity is the difference between the value of your home and the amount you owe on your mortgage. By overpaying on your mortgage, you’ll build equity in your home more quickly, which can be valuable if you want to sell your property in the future.
Having a mortgage can be stressful, especially if you’re struggling to keep up with the repayments. By overpaying on your mortgage, you’ll reduce the amount of debt you have, which can help to alleviate financial stress.
If you’re nearing retirement age, overpaying on your mortgage can be a great way to become debt-free before you retire. This means you’ll have more disposable income during your retirement years and less financial stress.
By overpaying on your mortgage, you’ll have more flexibility if your financial circumstances change. For example, if you need to move to a new home, you may be able to afford a larger deposit or qualify for a larger mortgage because you’ve built up equity in your current property.
If you have the means to make overpayments, it’s definitely worth considering. However, before you do, it’s always a good idea to check with a mortgage adviser to ensure that there are no penalties or fees associated with making extra payments.
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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.