Many of us want to be untied to our mortgage. It is likely the
most expensive bill you pay every month. Although the interest you pay
on your mortgage is tax deductible, all that interest would be better
off put away in an investment account. Even at a low interest rate, you
could still end up paying hundreds of thousands of dollars over the term
of your loan.
So how can one go about paying off a mortgage
faster? It's all about the term, which is how long the mortgage contract
lasts. The term you choose - 1, 3, 5 or 7 years or some other period -
dictates the amount of interest you'll pay. Whether you choose a fixed
rate or a variable rate will also affect your interest payments.
The
most common term is the five-year fixed, chosen by more than 50 percent
of borrowers. Even though this term is the most popular, it's not
necessarily the right choice for every home buyer. The right term for
you may not be the one with the lowest rate. Some terms may lock you in
at a higher rate for many years, while others may subject you to
fluctuating rates. Discover the other options available, as well as
their benefits and disadvantages.