Paying off my Mortgage in the Current Economic Climate

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At the moment, the economy doesn't seem to be too great. Of course, many people are saying that they haven't felt any impact at all ... but these are the lucky ones who's jobs are relatively stable.

So far, I'd say that I was one of the lucky ones. To me all of four things has happened in the past year:

  1. I got a pay-rise
  2. I cut my spending
  3. there has been tax cuts
  4. there has been interest rate cuts

Therefore, with all these things going on, I am able to pay off more of my mortgage since I am currently on a floating rate.

The Plan

Since I have split my mortgage into a revolving and a repayment mortgage, I am able to pay a little more on both at the present moment. There will be no penalties since they are both on floating rates.

The overall plan is to eventually fix the larger of the two amounts (the repayment part) and keep paying a little extra on that. I shall also keep adding as much as I can afford to my revolving mortgage since that also acts as my emergency fund.

Attacking on Both Counts on Both Mortgages

By attacking both mortgages I am able to start bringing down the principal a lot faster than I ever have and because some of it is my revolving mortgage, I don't have to worry about having it disappear since that acts as my emergency fund.

I'm also attacking the larger of my mortgages on two counts too, since my interest has come down and I've upped my repayments.

All in all, I'm currently on track to repay my home loan in just less than 8 years. That would take me to a total of 11 years since the mortgage started.

Not a bad saving on all that extra interest I'd otherwise have to pay.

Labels: planning, repaying

Inserted: 2009-06-16 21:22 (8 months, 3 weeks ago)

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