Posted by: dan

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By Tony Dhami

Dealing with debt by accelerating your mortgage payments can be a very smart, efficient, and successful way of paying down your mortgage, while paying less in interest.

There are a couple of ways to do this effectively. First, commit to the lowest amortization period you can while still being able to make the payments and qualify for the mortgage amount you require. The lower your amortization period is (25 years versus 35 years), the higher your payments, but the less you will pay in interest over the life of your mortgage.

Secondly, you can accelerate your monthly mortgage payments into bi-weekly or weekly payments, thus paying down your mortgage with less interest. For accelerated bi-weekly payments, you make a payment every two weeks (monthly payment divided by two) but because there are 52 weeks in the year, you end up making an extra 2 payments in the year.

Of course, accelerated payments don’t necessarily do anything for erasing debt unless there is a change in spending habits made. By rolling your debt into your mortgage (by refinancing) allows you to pay lower interest rate on your debt (no 18% credit card debt), but doesn’t stop you from re-accumulating that debt by continuing to overspend