I want to pay off my mortgage in 5 years please help!

I'm soon to be 33 and I'm fed up of making mortgage payments and just want the damn thing to end as soon as possible. I have $136,000 remaining on my mortgage and I have another 15 years remaining on the term but I want to pay off the mortgage as soon as possible so I'm not constrained by the monthly payment. I'm currently paying $1040 per month in repayments and I'm on a high rate of 4.74%. I have heard stories about how people have paid off their mortgages really quickly using strategies such as interest minimization and credit card to reduce the amortization schedule. Any suggestions would be helpful.

Tip 3: Find a Better Rate

You mentioned that your mortgage rate was 4.74% which is way high. You could probably find some much better deals by making a few phone calls. If you were to reduce your mortgage interest rate by 1 % you could save $200 dollars in mortgage payments which you could then divert towards paying off the capital. You could even consider going with another bank or financial institution as loyalty never pays. I was on a 5.1% variable rate, I made a phone call to my mortgage company and they offered my 2.99% fixed which meant I saved nearly $450 dollars on my mortgage payments. Take action now and call your mortgage company to see if they can offer you a better deal.

Tip 4: Maximize Your Space

This idea worked really well for me. We had a mortgage on a three bedroom property and there were only 2 adults and once child who were living in one room. The reason we bought more space is we were planning on having more children but we're still waiting for the right time. We were able to rent out our two rooms to extended family members who were looking for a room to rent and we were able to rent out the attic space as storage at really low rates compared to other storage companies.

I was able to raise an extra $700 dollars every month which was paid into my mortgage account to reduce the capital amount I needed to repay. I'm now thinking of make this a permanent change and possibly extending into the loft if we need more room. Once of the best ways to pay off your mortgage is to use other people's money through rent payments. If I can continue this for another 5 years I'll be able to shave 10 years off my mortgage and save thousands in interest payments.

If you want to pay off $136,000 Dollars in five years you need to break this monumental task into more manageable projects. If you want to pay off $136,000 in five years consider the following.

You need to pay off $27,200 Per Year
You need to pay off $2,266 Per Month
You need to pay off $75 Per Day

The first thing you need to do is cut down on your expense and find as many units of $75 dollars. If you can find 365 units of $75 dollars you will be able to achieve your dreams of being mortgage free.

How to Save Units

1. Take homemade sandwiches to work - Saving £1250 which is 16 Units of Savings

2. Use a Discount Grocer and Aim for 50% reduction - Saving $4800 which is 64 Units of Savings

3. Sell Car and use a Bike to travel - Savings $5000 which is 67 Units of Savings

4. Buy everything second hand from eBay and Charity Stores - Savings $3000 which is 40 Units of savings

Your aim ton find or make 365 units of $75 savings per year so you can hit your target of paying off the $136,000 in 5 years. Good Luck

Tip 5: Use Credit Cards to Pay Off Mortgage

I realize that this is going against the grain of all personal finance advice but take a moment to think about it. Using credit cards to reduce your mortgage balance can save you thousands of dollars in long term interest payments and also reduce the term of the mortgage. I was able to shed years of my mortgage using zero percent credit cards as well as higher rate credit cards. Check out the following video which explains the entire process. By using creditcards which are referred to as debt weapons you could save thousands and become mortgage free in 5 years.

Tip 6: Improve Your Credit Score

For me this is a no brainer and will help you to pay off your mortgage even sooner. The first step is to check your credit file. You could get a online copy for free using some credit reference sites. Once you've got your credit report find ways to improve your credit history. Make payments on time and overpay in advance and fix all discrepancies. Once your credit score improves you need to get a better mortgage rate and apply for more credit cards. The lower the rate the less you will pay in interest and you can divert the amount saved into paying off the capital. The trick is to divert from interest payments to capital payments. You can also use zero percent credit cards to overpay your mortgage so term reduces even quicker. As long as you have enough surplus income to pay off your credit cards you can shave years off of the amortization.

I used this exact same method and I'm so much better off. I'm paying less in interest which I'm using to pay off capital payments and I am getting zero percent offers on credit cards which I'm using to slash my mortgage balance. It does take a lot of discipline and courage to use CC to pay off mortgage quicker but it is very effective.

Tip 7: Make a Mortgage Donation Box

We have a money box at the end of the corridor which we use to put all our nickels and cents in. We've labelled this box Mortgage Challenge and the rule is we must put some coins in there everyday. We use cash a lot of the time so every time we have something leftover from our budget we always stick it in the Mortgage Donation Box. At the end of the year we open the box and usually we've accumulated between one and two months mortgage payment which we use to make an overpayment. We have been doing this for five years now and so far we've shed 7 years off our 30 year mortgage term! The more we do this the more quicker we'll be debt free.

Some of the other tips mentioned here are really useful and I'm going to be trying them. I may not be able to pay off my mortgage in five years but I'm sure I'll be able to do it in another 7 years. Great thread, thanks for sharing all the tips.

Tip 10: Buy Everything Second Hand

This tip has helped me to pay off all my debt and I'm completely debt free. I've paid off my mortgage in 8 years, paid off all my credit card debts and have a nice retirement and emergency fund. All of these achievements have been down to buying everything second hand at 80% less than the retail price. Every time I needed to replace my appliances I went to sites like Free Cycle and eBay. Every time I needed clothes I bought used on eBay. Every time I needed groceries I bought items from discount stores usually near their sell by dates which meant they were 80% less. Every time I bought something that was discounted I paid the difference into my savings account which was then used to make overpayments to my mortgage so I could pay it off sooner. Seriously people, this works. If you need a new blender and the you find one you like for $50 try find a similar quality item on sites like eBay for £5. Once you made the purchase stick the $45 into the savings account or pay off debt. It seriously works!

Hope you pay off your mortgage in 5!

Tip 11: Use An Offset Account

You could switch to an offset account and use your savings to reduce the interest on your mortgage. I had a fixed rate mortgage which I switched to an offset mortgage. I then ploughed all my savings into the Offset Mortgage Account which reduced the interest payments significantly but I had to forego interest on the savings. I also had my entire salary paid into my offset account so I could reduce the interest even further. All the savings I made in interest were then used to pay off the capital amount which further increased the speed of payoff. If you're serious about paying off your mortgage switch to a Mortgage offset account and use your savings and salary to reduce the mortgage term.

Tip 12: Turn Your Mortgage into a Retirement Account

Our family of 3 live in a 5 bedroom home in London which we bought during the financial crisis because of the knock down prices at the time. Our plan was to have no more than one child and use the property as a retirement investment so we could retire as soon as possible. We live in one of the rooms and we rent the other 5 out as we have a Home of Multiple Occupancy Licence. We use the rent to pay off the mortgage interest, repayments and overpayments. We also use any surplus income that we have and we plough it into our mortgage accounts to pay off the mortgage quicker. We do not make any retirement contributions as we are planning on using this property as a retirement vehicle. Once we pay off the house we are expecting to receive £3000 in monthly rents. We are then planning on downsizing to a smaller space and expect to get a mortgage where the repayments are between £500 and £1000. We will use the remaining money to live on and pay off the second mortgage quicker on the smaller property. Eventually we should have £3000 per month to live on comfortably without the need to work. Really enjoyed reading this thread and I'm thinking of implementing some of the strategies mentioned here. Thanks

Tip 13: Move Out

This might seem like an extreme tip but I thought I'd share because you're desperate to pay off your mortgage. Once of the quickest ways to pay off your mortgage is to move out. You could buy a Minivan and then have it easily converted into a home with working water and sanitation. If you're living alone you could easily make this switch and only have the bare essentials that you need. You can then rent your entire home out and use all the payments to make overpayments to your mortgage. You would also save money on energy and this savings could be diverted towards your mortgage account. The reason why this strategy is so effective is because all the rent is diverted towards paying off the mortgage. You also get to keep most of your salary because of the savings you make by living in a van and you can divert this amount into your mortgage account too. By making these changes included some of the above tips you could probably pay off your mortgage in less than 5 years.

Tip 14: Move into Smaller Property

I got so fed up of paying my mortgage for space that I didn't need and moved into a smaller property with potential for further rooms to be built. I was living in a 3 bedroom home and paying $1600 in mortgage payments. I then decided to move to a smaller home with 1.5 bedroom with the potential of creating another 2 bedrooms if I choose to. I was able to reduce my mortgage debt from $1600 per month to $780 per month which amounts to a saving of $820. This change has been stressful and meant downsizing and de-cluttering but the amount of flexibility I have now is amazing. I am now making relentless overpayments to pay off the smaller mortgage and hope to be debt free in a few years time. Great tips, I'm actually going to use the bi weekly payments strategy and the debt weapons strategy. Living in a van seems a little too extreme.

Tip 16: Maximize Storage Space

This strategy has helped me to create another stream of passive income which I use to make overpayments to my mortgage. I have converted two living spaces into well maintained storage spaces which are safe and locked away. I charge half for the space compared to retail and commercial storage spaces. I rent these spaces out all the time and offer a great service so customers can always check their stuff. If they miss a few payments I sell the stuff and usually make more money (Like Storage Wars). Anyway this strategy has helped me to get a nice stream of passive income and I use all of this to make overpayments to my mortgage. Hope this helps and if you need further clarification send me a PM.

Tip 17: Consider Going on an Extreme Budget

When I got the itch to pay off my mortgage years back I went on an extreme budget. When I mean extreme I really mean being extreme in my spending. I did the following to really cut down our expenses.

- Cancelled all magazine subscriptions
- Cancelled cable TV and Sold the TV and Equipment
- Cancelled gas energy, I was only left with electricity
- Sold most appliances so I had to do everything the old fashioned way
- Cancelled gym membership
- Sold car and bought a bike
- Only bought second hand clothes
- Only bought tinned foods and breads
- Never ate out
- No vacations until mortgage paid off
- Get another job
- Rent out all rooms

I did all this until I was mortgage free and it took me 3 and a half years to pay off the beast. Now I'm completely free of debt and mortgage and I feel like a weight has been lifted off my shoulder. All these habits have helped me become more frugal so I can keep my expense down. I now have substantial savings in my retirement account and investments account and all my expenses are covered from the income from my investment accounts so I'm financially independent. All this hard work that you are doing now will definitely pay off in the future. good Luck.

Tip 18: Live With Your Parents

I know that this tip might be frown upon but this is exactly how I paid my mortgage off considerably early. My parents live in a 4 bedroom home and three of the rooms are empty. They love it when we visit and always ask us to stay over. We decided to move into my parents home and rent out our property. We've maximised the property by subletting the rooms and all the rent goes towards paying off the capital repayment of the mortgage. We continue to make mortgage payments even though we live with my parents. We share the cost of food here as well so our expenses have fallen which allows us to pay even more. We expect to be mortgage free in a few years time.

If you do have parents with extra room you could always consider moving in with them if they will have you. You get to save money and payoff debt which is essential for building a long term financially secure future!