Do you own a home after years of renting? Congrats! You’ve reached a major milestone and accomplishment in life.

While paying out of pocket for your new home was an option, you likely went the mortgage route — according to the 2016 Census of Population and Housing, 67% of the 8.3 million households in Australia were housed by homeowners, not  renters. And of those people, 35% of them purchased their home with a mortgage.

Many people go with a mortgage becomes it comes with flexibility. It gives you the chance to venture outside of the world of renting and enter the homeowning spectrum. But some may agree that over time, a mortgage can actually start to feel like you’re carrying a heavy burden on your shoulders. According to Realestate.com.au, the average home loan is serviced over a 25-year period. Within that time frame, so many different unexpected events could occur, which can ultimately create a heavy financial loss over time if you’re still working on paying off that mortgage.

But did you know that you’re actually not tied down to that payment period? You can pay off your mortgage in advance.

If you’re interested in letting go of the financial burden earlier than expected, read on to learn about best practices, steps and benefits of making early payments:

A financial advisor can help you put a new payment plan in place.

The benefits of paying off your home in advance

Paying your mortgage off early comes with many benefits. One of the biggest advantages is the interest you pay over time — according to Your Mortgage Australia, the less amount of time you spend to pay off your home loan and the lower the principal amount is on your mortgage, the less you’ll be expected to pay in interest. This could ultimately put thousands of dollars back into your savings account, giving your more financial freedom than you were expecting while owning a house.

Steps to paying off your loan early

Making extra payments saves you money in the long run and frees you from what you might consider a heavy financial burden. To get rid of your mortgage debt as quickly as possible, consider the following tips:

1. Make extra payments right away
Making more than your monthly payment is one of the easiest ways to shorten the life of your loan. Think about the ways you make extra money throughout the year — maybe it’s your tax return or the lump sum bonus you made at work in the last quarter. If you randomly find yourself with more money than you expected, put it toward your mortgage.

2. Try fortnightly payments instead of monthly
If you want to make more payments but want to do it in a more structured and subtle way, Moneysmart recommends making fortnightly payments. Instead of paying one lump sum on a monthly basis, you would instead pay half of your monthly payment every two weeks. This sounds like it wouldn’t make a difference, it actually amounts to making an extra month’s repayment over a year. Who knew!

Making payments in advance can free up money for you and your family in the future.

3. Shop around for a lower interest rate
Maybe it’s your current loan that’s the problem — you need one that’s going to set you up for success when you start making extra payments. Compare the interest rates on similar loans to decide if switching lenders makes the most sense for you. Your current lender may even decide to match the lower rate you found, making it easier for you to start making repayments without the hassle of moving everything over.

If you do decide to switch to a new lender, remember to avoid an interest-only loan. This means you only pay the interest on the amount of money that was loaned out for you, and these are designed to be paid back during a set period of time. In other words, even though you’re making extra payments, you’ll still pay more interest and you might not even notice a dent in your debt.

4. Think about your interest rate options
If you plan to shop around for a lower interest rate, consider the different options you have. You can use fixed or variable interest rates, or even a combination of both. Your best option will be determined by your financial situation and how quickly you want to pay off your mortgage.

5. Consider debt recycling
Debt recycling is a strategy that allows you to pay off non-deductible debt in a faster, more efficient manner. This route can help you invest to build wealth while driving the extra investment income into the home mortgage to pay it down sooner. If the value of your investment goes up, you could even potentially sell the investment and add extra capital to pay off (or pay down) your mortgage.

How SmartMoney Wealth Management can help you pay off your home quickly

Are you ready to pay off your mortgage but you’re not sure where to get started? You’ve come to the right place.

Paying off your mortgage can be simple and straightforward with professional assistance. One of the trusted financial planners and finance strategists at SmartMoney Wealth Management can help you put a plan in place that benefits you and your family in the future.

Our team of experts is trained to help you design a tailored financial plan that meets your wants and needs, which in this case, is becoming mortgage-free. An advisor will go over all of the details you need to know about paying off your home loan sooner than planned. Everything from making extra payments and understanding variable rates to reducing the interest you pay and more will be discussed after evaluating your current financial situation.

Paying down debt and watching your savings account grow again can be some of the best feelings in life. For more information on how we can help you pay off your mortgage as soon as possible, contact us directly today.