Friday, March 29, 2024

How to pay off your home loan faster

So James can start putting extra repayments towards his principal. If he had paid an extra Sh10,000 per month he would have cut his total interest down from Sh23 million to Sh15 million and he would pay off his mortgage in 14 years. If he had put Sh20, 000, interest costs would be Sh12 million and mortgage completed in 12 years.

Well, James now knows what to do. He has decided to finish paying off this loan within the next five years. He will start putting an extra Sh25, 000 per month and increase this amount by at least Sh10, 000 every year. If you have a mortgage or any other loan, just be clever about it. Put extra payments towards the loan and you will pay it down faster and reduce your overall interest costs. Ensure by writing your instructions to the bank that your extra payments are applied towards the principal.

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