We all dream of living a debt-free lifestyle, where we own our own homes outright and we have savings to pursue other passions in life. And if it’s a mortgage repayment that might be affecting in achieving this dream, then read these tips to pay off your loan quicker.
1. Make payments every fortnight
Interest on home loans is calculated daily. By switching from a monthly payment plan to a fortnightly payment plan, you'll make the equivalent of an extra month's repayment each year (as each year has 26 fortnights). This may help reduce the interest you pay over the term of your loan so you are debt free sooner.
2. Consider an Offset Account
An offset account is a transactional savings account linked to your home loan. When interest on your home loan is calculated, the balance of your offset account is taken off the principal amount owing. This can reduce the amount of interest you are charged and help you pay off your principal and interest home loan faster.
3. Make extra payments
Extra repayments on your mortgage can cut your loan by years. Got a bonus, the tax refund has come through, you can put into your mortgage could save you thousands in interest. If your lender allows it without any charges then It could be a small step to pay off the mortgage quicker.
4. Consider refinancing your home loan
If you’ve reviewed your home loan and found it doesn’t suit your needs, you may want to think about refinancing your loan. Renegotiating your current rate with your existing lender or moving to a new lender that offers a lower interest rate may result in savings and help reduce the term of your principal and interest loan.
5. Do an annual home loan health check
Every day is a new day and there are always lenders competing for your business. So don’t set up your mortgage and forget it. Take some time every year to do a check and see what offers are out there.
Reach out to us and see if we can help you pay off your mortgage quicker.