Buying a property in Sydney is perhaps the most expensive decision you’ve ever made in your lifetime. Here are 3 tactics you can consider if you’d like to become a mortgage-free homeowner.
Make Lump Sum Payments to Reduce your Mortgage Burden
If you come across a work bonus or an inheritance, you may want to use that windfall to make a lump sum payment into your mortgage repayment. This strategy enables you to reduce your repayment timeline commitment, so you don’t have to worry about paying your mortgage over the next 30 years. The more lump sum payments you put into your mortgage, the quicker you will be able to pay back your home loan. You can even set up repayments to coincide with the days you get paid, so you can always maximise the amount of money you set aside for the home loan repayment. Leaving your repayments to the end of the month can put you under significant pressure, so you should plan your mortgage repayments around the same time you get paid.
Offer your House/Room on Rent for the Holidays
If you’re planning on taking a vacation for a few weeks or have an extra bedroom to spare, why not consider giving it out on rent? Plenty of travellers are looking for cheap bargains for accommodation and will be more than happy to rent out a room or your whole home. This is an excellent way to earn some extra income. For example, assume you rent out your room in Sydney on Airbnb for $100 per night – this is excellent value for money for vacationers. If you rent out the room for just 10 nights in a month, you could use the additional $1000 you’ve earned to pay back your home loan faster.
Use Energy Efficient Lights and Appliances
The average annual cost of electricity in NSW households is $1925, which amounts to $160.41 every month. Lighting consumes 8 to 10 percent of the average household electricity. Switching to energy efficient lighting technology and appliances can reduce the amount of energy you utilise for lighting by 50 percent. Similarly, appliances can use up to 30 percent of the energy in your home. Switching to higher energy rated appliances will help you save money on your electricity bills and reduce your carbon footprint. Most Australian electrical appliances come with an Energy Rating Label to enable you to compare the electrical consumption between different appliances – higher rated appliances consume less electricity than lower rated appliances. The added savings from using energy efficient lights and higher energy rated appliances can be utilised towards paying back your mortgage faster.
When you buy a property, you have to consider the cost of running your home over the years. Use these smart strategies to turn into a mortgage-free homeowner as soon as possible, so that you are free of stress and worry.