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WANT to keep thousands of dollars in your pocket rather than give it to the bank?

 

WANT to keep thousands of dollars in your pocket rather than give it to the bank?

Written by: Michelle Hele network online real estate editorNews Corp Australia Network , see original article in  News.com.au

 

New research has revealed nine out of ten Australian borrowers have tried to pay off their home loans faster.

Just maintaining current loan repayment levels every time there is an interest-rate cut can have a significant impact on the life of your loan and how much you end up paying in the long run.

According to finder.com.au there are plenty of other tricks that can save you money and it doesn’t mean going without.

A survey by finder.com.au found that 40 per cent of borrowers made more frequent payments, either fortnightly or weekly instead of monthly.

This change could save more than $77,000 in interest payments on a $375,000 mortgage at 5.5 per cent interest.

Monthly repayments would be $2129 and the total cost of the loan would be $766,515.

Fortnightly repayments would save $77,819 in interest and you would reduce the loan term by five years and one month.

Using an offset account was another popular way to reduce interest payments with a third of borrowers doing this.

Negotiating a cheaper interest rate with an existing lender or refinancing to a new lender could also save substantial money.

Just maintaining current repayments when interest rates drops can make a big difference to what you pay over the long term.

Just maintaining current repayments when interest rates drops can make a big difference to what you pay over the long term.Source:istock

she said.

She said paying down a mortgage while interest rates were low could give borrowers a significant buffer against future increases.

Women were more likely (90 per cent) than men (88 per cent) to pay down their mortgage faster.

While Baby Boomers (18 per cent) were twice as likely as Generation X (9 per cent) to have never tried paying off their mortgage faster.

TIPS ON HOW TO PAY OFF YOUR MORTGAGE SOONER

– Make additional repayments

– Make weekly or fortnightly repayments instead of monthly

– Use an offset account

– Round up mortgage repayments so paying more each month

– Negotiate a lower interest rate

Castle Mortgages can look at refinancing your current home loan to get you a better rate, enabling you  to pay that home loan down quicker. We can help you structure your debt to better suit your circumstances. Any questions you may have , please do not hesitate to get in touch today.

 

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