October 02, 2014
As a home owner a major financial goal is paying off your mortgage as quickly as possible.
According to the Reserve Bank of Australia, 50% of all Australian borrowers are ahead of their mortgage repayments; resulting in Australia being among the highest in the world for advanced repayment rates.
Cutting your loan term down is not as hard as it sounds, making a few minor adjustments to managing your finances will set you on the path to paying your mortgage off sooner.
A few tips to reduce the life of your loan:
It is worth reviewing your home loan regularly, as both your own circumstances and the financial market is constantly changing. Ensuring you are receiving the best product in today’s market can possibly save you hundreds off your repayments.
Switching from monthly to fortnightly repayments will reduce the daily interest being charged against your outstanding balance, resulting in the term reducing
An offset account is an easy way to cut down your interest; an offset account is set up like a standard transaction account, however the money in the account is used to offset the interest on your loan, with interest only being charged on the remaining balance of the loan.
By cutting down on unnecessary expenses and sticking to a budget, it can reduce the life of your loan drastically.
Adding any extra funds for example your yearly tax return, work bonus, gifted funds etc. or even $50 a week towards your repayments can cut a significant number of years off your loan.
These are only a few ways you can shorten the life of your loan, seeking professional advice will ensure you are on the right path to reducing your loan and saving money off your mortgage.
Call Mortgage Choice Bundall on 07 5504 5569, to discuss a new or existing home loan and make sure you are receiving the right advice about your finances.
Use our mortgage calculator to estimate loan repayments, borrowing capacity, savings target and more…
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