So you’re close to getting a home loan or already have one? Congratulations! Having a home or investment property is the ultimate dream for many individuals and families, however paying a loan off over 30 years can be quite an enormous ask. We at switchmyloan.com.au are about helping you pay off your home loan faster. We have created a list of 6 tips on how to save time on your loan on paying it off faster:
1. Choose fortnightly loan repayments instead of monthly. As interest is calculated daily and paid at the end of each month, choosing to pay off your loan can take away five years interest on a standard $300,000 home loan straight away – reducing the term from 30 years to 25 instantly!
2. Open an offset account. An offset account is a savings account that lets you save and at the same time helps to take away interest from your loan. For example, if you have a loan of $200,000 and a personal savings of $15,000 in an offset account, you would only be paying interest on $185,000 of the loan. This can help take months if not years off your loan!
3. Make extra repayments wherever possible. Got a little bit of extra cash lying around? Think about contributing more from your own pocket. A standard 6% home loan on a 30-year $300,000 mortage would cost $900 a fortnight in repayments. By merely contributing an extra $50 per fortnight you can save an extra 3 years in repayments and $35,000 in interest!
4. If interest rates drop, it is a wise idea to continue payments at the same rate you had previously been paying. For example if your minimum compulsory mortgage repayment gets dropped from $900 per fortnight to $885 per fortnight, keep paying the extra $15 as it could potentially save thousands of dollars and months off your loan.
5. Got a large tax refund? Got a bonus from work? Sold your car or some other asset? Consider a lump repayment into your mortgage account. A few large extra repayments over the duration of your loan can help save on your interest expense.
6. Be open to refinancing. At switchmyloan.com.au we are all about trying to help you get the better deal. In Australia we are lucky to have a competitive market and different banks and institutions offer different deals with different fees and interest rates. By refinancing your home loan at a better interest rate you can save hundreds of dollars a year, and if you keep paying your old repayment amount this will take months off your loan and save you thousands in interest!
For more information, please call 1300 307 155 or visit www.switchmyloan.com.au
Call 1300 307 155 and start saving today!
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