You’ve got plans, hopes and dreams - and they all cost money. However, there is a way to free up cash so you can start ticking off your wish list sooner
The solution can be as simple as shopping around for a great deal on your home loan.
Big savings up for grabs
Home loan interest rates are the lowest in 50 years. But don’t let that stop you checking out different lenders.
Your home loan is probably the biggest financial commitment you’ll ever sign up for, so it’s important to be sure you’ve got a great deal.
Even though interest rates are the lowest in decades, there’s still a big variation in home loan rates across different lenders.
Despite the opportunities to save with a lower rate, seven out of ten home buyers go with a lender they already bank with . That’s a shame because what can seem like a convenient time-saver can turn out to be a big money waster.
With the big banks, for instance, you could pay a home loan rate of more than 5.0% p.a . Or, you could pay less than 3.0% p.a. on some of the home loans available through Mortgage Choice .
That’s why it’s worth checking out what’s being offered across a wide selection of lenders. A great rate doesn’t just make your loan repayments easier to live with. It can also see you save a bundle in interest charges.
The savings stack up
What’s really exciting is how a small difference in your loan rate can add up to huge savings over time.
Let’s say you take out a home loan for $500,000 with a rate of 4.5% p.a. Seems pretty reasonable, right?
Not really. At 4.5% p.a., you’ll pay about $310,000 in interest over the life of the loan . Ouch.
So let’s shake things up a little.
By shopping around, you may be able to trim your home loan rate to just 3.0% p.a. That’s only a 1.0% difference in the rate. But watch the savings stack up over time.
On that same $500,000 home loan, paying just 3.0% p.a. can cut your total interest tab to around $197,000 . That’s a saving of more than $100,000 – money going straight into your pocket instead of your banks’.
How will you spend the extra cash?
So what will $100,000 buy you? Let’s see.
Having an extra $100,000 to your name could see you smash weekend brekkies with 40,000 avocados (sourdough not included), hit the highway in style with a new BMW, or rub shoulders with the stars with five first-class return airfares to New York.
Or, you could put the $100,000 saving to work wiping out your HELP debt, chill out with a Netflix subscription for the rest of your life, or open your home to 50 adorable puppies.
Okay, maybe you’re not ready for 50 puppies. But you get the idea.