Paying off your mortgage early sounds like a dream. 

But it may be easier to do than you think and can save you thousands in interest payments. 

Here are three tips if you want to pay off your mortgage in the next few years.

Paying as little as an extra €50 a month on top of your normal mortgage repayment can make all the difference to how much interest you pay and how quickly you’re rid of your mortgage.

For example, if you owe €130,000 and have 20 years left on a 2.5% repayment mortgage, by paying an extra €50 a month, you’ll pay off your mortgage 1 year and 8 months earlier, saving €3,235 in interest. If you overpay by €100 a month, it would be reduced by 3 years and 1 month and you’d save €5,920 in interest.

Before changing anything, check that there aren’t any penalties for overpaying. 

Most mortgages now allow some level of overpayment – typically up to 10% of the total mortgage balance each year on fixed rate deals (variable rates, where your mortgage rate can go up or down, often don’t have penalties). Be careful not to go over any limits, as the penalties can run into hundreds or even thousands of pounds.

If you can’t afford to pay any extra, check to see if you could switch to a better mortgage rate.

Similar to energy and broadband providers, banks regularly undercut each other to get new customers.

Right now, because interest rates are so low, people who took out a mortgage sometime ago are able to switch to a much better interest rate to either: 

✅ Pay significantly less each month

✅ Reduce their mortgage term

Many lenders also offer cashback bonuses towards switchers which makes it even more attractive to the more than 300,000 eligible homeowners in Ireland that are on high standard mortgage rates.

Even if we snap up a property at the average age of 34, and take out a 25-year mortgage, it only takes a little bit of life to get in the way and leave us repaying well into retirement. 

One of the ways to do this is by consolidating old workplace pensions into a Personal Retirement Bond or PRB 🏠 

By tracking down and combining all the old pensions from all previous jobs into a PRB, which you own and control, you can choose how to invest this money and when to draw on it. 

Our team of experts will help with this process and provide guidance throughout.

What makes a PRB different is that it can be drawn from age 50 onwards – with 25% available as a tax-free lump sum that you can use to pay off the balance of mortgage.

A lump-sum injection to become mortgage free.

Are you able to pay off your mortgage early? Could you swap to a lower interest rate mortgage? Is your pension eligible for early release?

Take the eligibility assessment below and see if you are eligible.

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