Tips to Pay Off Your Mortgage before Retirement
If you ask the average homeowner whether or not they’d prefer to have their mortgage paid off before retirement, you’ll probably get a resounding “yes”. After all, continuing to make monthly payments is not a recurring part of many people’s retirement fantasies.
…Which makes sense! The whole idea of retirement is that all the “work” we do in life to sustain ourselves is over, leaving only leisure time. No more work, no more commitments and certainly no more debt.
But while the average homeowner would like to have their mortgage paid off leading up to retirement, the likelihood of that happening decreases with time. Many Australians will not be able to own their home before retirement because the chances that life events will deter future financial plans are simply too great.
Recent studies show that one in three Australians between the ages of 50 and 70 are worried about rising property prices and their implications for their retirement. There are no guarantees in life, but with some handy tips and a bit of careful forecasting, you can be the exception rather than the rule.
Here are a few considerations that may help you to pay off your mortgage prior to retirement:
The first and most obvious consideration is income. More money means more of your mortgage paid off.
That part is simple enough to understand. However, you may not have considered the various ways you can boost your income as a property owner. Consider, for instance, adding a granny flat to your property to rent out (or simply renting out one of the extra rooms).
If your financial situation is complicated, it might be worth consulting with a financial advisor. Financial advisors consider all your assets, equities and funds before providing a reasonable plan of action suited to your goals. They are paid professionals whose expertise revolves around making the numbers work in your favour.
If you’re in a situation where you absolutely must pay off your mortgage before retirement, you can consider more extreme measures. You may decide, for example, that it’s best to sell your property so that you can move to a smaller or more manageable one.
If you live in the city, you might consider the financial gains of moving out to the suburbs. Such a seemingly simple move may save you hundreds of thousands of dollars. Some retirees are even moving overseas to places like Thailand or Vietnam to enjoy the additional savings.
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.
But don’t worry, we can help with that.
If you’re worried about paying off your mortgage before retirement, you might be able to switch to a less expensive home loan package with Mortgage House. The cost of your mortgage can drastically affect your financial planning, so it pays to speak to the experts about it.