Do you feel that you may never pay off your current home loan?
We have five quick tips on reducing the size of your mortgage. The faster you can pay it off the sooner you will have more funds available to improve your lifestyle or save for that well-earned retirement.
Offset Account: If you keep your everyday savings or transactional account linked to your home loan, the interest on your home loan will be calculated less the money in the account at the end of every day, which could save you thousands of dollars each year.
Extra Repayments: Try adding another $20 a week to your repayments and this could reduce the length of your home loan by at least four years, potentially savings tens of thousands of dollars.
Pay More Frequently: Alternatively, increase the frequency of your repayments. If your loan contract says to pay these monthly and you can pay weekly or even fortnightly this could also significantly lower the number of years of repayments.
Fees: Check your loan for annual or monthly fees. Sometimes borrowers can’t make additional repayments but saving $400 a year on a package when you don’t use a credit card or the loan is in its final 10 years could mean savings.
Interest Rates: Compare your home loan interest rate, often this doesn’t mean refinancing but shopping your bank or switching to a lower rate with your existing lender. Banks always amend their packages and tiered rates for discounts. Make sure you are getting the best rate your bank can offer right now in this highly competitive market.
Priority Lending can provide you with a report on the best loan solutions for your finance needs, including information on fees, interest rates, loan structures, monthly payments, terms and conditions.
Source: Priority Lending