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5 Expert Budgeting Tips To Repay Your Mortgage Loan

Most of you will have an ongoing mortgage that you’ve been paying off for years. Those of you that don’t have one will probably need one if you ever buy a house. One of the worst things about mortgages is finding the money to pay them off – and they can last for an extremely long time. The trick is learning how to budget as effectively as can be, allowing for larger mortgage payments, leading to a shorter loan period. 

With that in mind, here are some budgeting tips to help you repay your mortgage a lot faster than you think:

Put down a bigger down payment

To start, you can actually make your mortgage easier to repay if you place a bigger down payment at the start. Nowadays, you can get a mortgage with a 5% deposit. However, it might be smarter to save up enough money so you can make a 10/15/20% deposit instead. Why? Because it means you’ll need a smaller mortgage, meaning the monthly payments will be less. 

Alternatively, because the loan is smaller, you might be able to repay it faster. Think about how much you can afford to pay each month – you can either reduce that with a smaller mortgage, meaning the duration is the same as a standard one. Or, you can maintain the same payments, reducing the years. It’s all down to you, and a good idea is to view real estate websites to get an idea of how much houses will cost. From here, you can work out your maximum down payment, helping you work out the cost of your mortgage. 

Pay fewer bills each month

How many bills are you paying each month? There are some bills that will have to keep recurring each and every month. These will include the following:

  • Energy bills
  • Utility bills
  • Internet bills
  • Phone bills
  • Rent (if you’re renting)

Basically, these are things that you have to pay for. However, there are other bills you might have on top of that. You could pay for TV or streaming subscriptions – and these alone can add an extra three or four bills to your monthly expenses. If you want to repay your mortgage faster, you need to make larger monthly payments. To do this, you need to have more money available to spend on repayments. Consequently, reducing your bills will ensure that less money leaves your account each month. In turn, you can use this money towards mortgage payments. 

Consider all of the monthly bills you have, and get rid of those that aren’t technically essential. For instance, do you really need to pay for cable when you have Netflix? Or, do you need Netflix, Hulu, and Disney Plus? Check all of your direct debits and cancel all of the ones that aren’t really necessary. This will help you save more money each month for mortgage payments. 

Reduce the cost of your essential bills

Staying on the topic of bills, you shouldn’t be satisfied with what you’re currently paying. There will always be ways to reduce the cost of your current bills!

Take your energy bills, for example. You can so easily make them cheaper by following these simple steps:

  • Keep your heating off as much as possible, and turn the thermostat down when it’s on
  • Wrap up warm so you’re not cold
  • Insulate your home better to trap heat in
  • Turn off everything when it isn’t being used
  • Switch to more energy-saving light bulbs 
  • Use energy-saving modes on your appliances

You’ll be amazed at how much cheaper your energy bills will be when you implement these tips. But what about other bills – like your phone bill and water bill? With a water bill, using less water will help you save money. Stop leaving the faucet running, take quicker showers, and so on. With a phone bill, you can save money by comparing all the different contracts and picking one that’s the cheapest for what you need. 

In reality, comparing providers is something you should do for all bills – where possible. Switching energy suppliers can help you save money as well – or, threatening to switch can make companies reduce their prices to keep you as a customer. Do whatever it takes to reduce your monthly bills, and you will save more money. 

Make simple swaps when food shopping

An ongoing expense that you can’t go without, food shopping can drain your bank balance each month. It’s not technically a bill, seeing as you can choose where to shop and how much to spend each month. Still, we all make the mistake of spending far too much money on food at certain times. One of the biggest issues is that we are splashing the cash on branded items. 

For example, you’re buying Coca-Cola or Pepsi instead of unbranded drinks that are very similar. The reality of the food industry is that most of the unbranded products you see are made in the same factories and with the same ingredients as the branded ones. You are paying more money for packaging and a logo, that’s it. There are rare situations where the branded goods taste nicer or last longer, but it’s never really enough to warrant the extra money. 

So, you can save money on your weekly food shop by swapping branded items for non-branded ones. All groceries stores have their own unbranded goods, or you can go to places like Aldi and Lidl. These super cheap stores have built a name for themselves by selling mostly unbranded things. It means they can afford to sell things at a much lower price, helping you save money. Honestly, you could slash the cost of your weekly food shop in half – or more – by going to Aldi or buying unbranded grocery store products. 

Set up standing orders and use multiple accounts

The final budgeting tip is to get jazzy with your accounting. Don’t just use one bank account to take care of everything, open up different ones. It’s a good idea to have an account that you use for bill payments, setting up a standing order to pay into it every month. This account will only contain money for your ongoing bills, which are probably paid by direct debit. 

Then, you have a direct debit to pay your mortgage payments from another account, taking the money out of there. It will mean that your main bank account will contain what’s leftover. This means you can use that money for food – as well as for other savings purposes. Take what’s left, subtract an average monthly food bill from it, then see what you have left to save. Try to put as much as possible in a separate savings account, which could be used as an emergency fund – or to save for something else. At this point, you might actually realize that you have plenty of money to pay for non-essentials, plus enough to put in your savings, and still a bit left. Here, you can take the bit that’s left and put it towards your mortgage. If you save it up during the year, you will be able to pay a lump sum at the end, further reducing how much you owe. 

Realistically, paying your mortgage off faster revolves around calculating the maximum you can repay every single month. What is the absolute max amount of money you can put towards mortgage repayments without damaging your quality of life? Find this out, and you can basically work out how big of a down payment you can make, reducing the number of years you’re paying back the loan.