Using Other Investments to Pay Down Your Mortgage
Is there a strategy for using other investments to pay down your mortgage?
Using other investments to pay down your mortgage balance is a smart financial strategy that can help homeowners save thousands of dollars in interest and build equity faster. Instead of letting investments sit idle, the money can be put to work by using them to reduce the mortgage balance. This can help homeowners achieve financial stability and independence much sooner.
One of the most common investments used to pay down the mortgage balance is a taxable brokerage account. This type of account typically holds stocks, bonds, and other investment vehicles that can be sold for cash. When the investments are sold, the proceeds can be used to make an extra mortgage payment, reducing the loan balance and the amount of interest that accrues over time.
Another investment option is Superannuation. These types of accounts are designed for retirement savings and are generally tax-advantaged. While early withdrawals from these accounts can result in penalties and taxes, there are exceptions that allow homeowners to use the funds to pay off their mortgage. For example, if a homeowner is over the age of 65+, they may be able to withdraw money from their Superannuation penalty-free.
Investing in real estate can also provide an opportunity to pay down the mortgage balance. If a homeowner owns rental property, they can use the rental income to make extra mortgage payments. Additionally, they can sell the property and use the proceeds to pay off the mortgage on their primary residence. Real estate can provide both income and long-term capital appreciation, making it a powerful investment tool for paying down the mortgage balance.
Finally, using a home equity line of credit (HELOC) is another way to pay down the mortgage balance. A HELOC is a type of loan that is secured by the equity in a homeowner’s property. The homeowner can access the loan funds as needed and use them to make extra mortgage payments.
Speak to a mortgage broker today about refinancing to set yourself up to pay off your home faster and avoid paying unnecessary interest.