Pay Off Your Home Faster: Same Budget, Smarter Cashflow
Published on October 27, 2024
You don't need a higher income to pay off your home faster; you need a smarter strategy. This article breaks down how redirecting your monthly cash flow through a daily-balance account, like a HELOC, can drastically reduce the amount of interest you pay, shortening your mortgage by years.
Table of Contents
The Problem with Your Chequing Account
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How Daily Interest Calculation Works in Your Favor
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The "Cashflow Sweep": A Day-by-Day Look
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Example: How Parking Your Paycheck Reduces Interest
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The Long-Term Impact on Your Net Worth
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Educational only, not financial advice. Estimates vary by spending patterns and lender terms.
Frequently Asked Questions
Will all my income go to the bank?
You deposit your income into the account, which immediately lowers the loan balance. You then pay all your bills and expenses from the same account. Your spending habits don't have to change, but your money works for you while it's there.
How much faster can I really pay off my home?
It depends on your income, expenses, and loan balance, but it’s not uncommon for people with positive cash flow to cut their 30-year mortgage down to 10-15 years. Our estimator can give you a personalized projection.
Is this strategy complicated to manage?
Once set up, it can be simpler than managing multiple accounts. Your HELOC becomes your primary chequing account. The key is discipline and monitoring your balance to ensure it's consistently decreasing over time.