If you’re thinking about reducing the term of your mortgage, you’re aiming to achieve financial freedom sooner and potentially save thousands in interest payments over the life of your loan. At Equinox, we can help you explore your options for reducing your term and understand how it might impact your finances, monthly payments, and long-term goals.
Why Reduce Your Mortgage Term?
Shortening your mortgage term can bring several benefits:
- Save on Interest: By paying off your mortgage sooner, you’ll reduce the overall interest paid over the life of the loan.
- Build Equity Faster: With higher monthly payments, more of each payment goes toward the principal balance, building equity at a quicker pace.
- Financial Freedom Sooner: A shorter term brings you closer to being mortgage-free, leaving more of your income available for retirement, investments, or other goals.
How It Works
There are different approaches to reducing your term. Some of the most popular methods include:
- Switching to a Shorter Term with a New Mortgage: When remortgaging, you might have the option to refinance with a shorter term, for example, moving from a 25-year term to a 15- or 20-year term.
- Increasing Monthly Payments: Alternatively, you can keep your current mortgage term and simply increase your monthly repayments, if permitted, helping to pay off the principal more quickly.
- Making Lump-Sum Payments: For those who come into extra funds—such as a bonus or inheritance—a one-off payment can significantly reduce your outstanding balance and shorten the loan term.
At Equinox, we’ll review each option with you, helping you find the most effective way to achieve your goals.
Considerations for Reducing Your Term
Before committing to a shorter term, it’s essential to think about:
- Monthly Affordability: A shorter term usually means higher monthly payments. We’ll work with you to ensure this aligns comfortably with your budget.
- Emergency Savings and Future Flexibility: Reducing your term can mean committing more of your income to your mortgage, so it’s important to maintain emergency savings and consider future changes in income or expenses.
- Early Repayment Charges (ERCs): Some mortgage products have ERCs for paying off the mortgage early or making overpayments. At Equinox, we’ll check if your current deal has any ERCs and assess whether switching products is in your best interest.
Options Available with Equinox
As a whole-of-market brokerage, we have access to lenders who offer flexible remortgage products for those wanting to reduce their term. Whether you're looking for lenders with high overpayment allowances or options for shorter-term fixed rates, we’ll ensure we’re finding the best fit for your objectives.
Ready to Take the Next Step?
Reducing your mortgage term is a powerful way to save on interest and achieve long-term financial freedom. If you’re ready to explore your options, reach out to Equinox today. We’re here to guide you through the process, ensuring your journey to becoming mortgage-free is as efficient and rewarding as possible.
​
​
