April 28, 2014
Everbody would like to be mortgage free
There are many ways to be pay off your home loan sooner, saving you thousands of dollars and shredding years off your home loan term. Here are my top 3 tips to owning your own home sooner:
1. Pay a little extra each repayment - By paying a small amount extra each repayment you will reduce the loan principal and save on interest. These extra repayments will be available for redraw in the future
2. Make fortnightly repayments - Making fortnightly repayments rather than monthly equates to 13 monthly repayments over the year. On an average $300,000 loan at 7.00% pa, your savings could be around $103,000 in interest. This could also reduce your loan term by up to 6 1/2 years
3. Consider an offset account - An offset account is a transaction account linked to your home loan. Your savings in the offset account reduce the balance of your home loan therefore, reducing the interest that is charged to the loan. Your regular loan repayment will in turn, be reducing your home loan principal.
How can I avoid mortgage stress?
Only borrow the amount you can comfortably afford to repay but keep in mind that life is full of challenges and changes which could alter your circumstances.
We can help you if your situation changes and you need to review your home loan.
What do I do if I can't meet my repayments?
First, you will need to review your household budget to determine if you can make any cuts to your spending. If you are at risk of missing a loan repayment, contact us as soon as possible to discuss a solution to suit your needs.