Paying off your mortgage becomes second nature, like walking your dog or cleaning your teeth. But should you look at how you could pay it off sooner?
Pay more than you need
Extra repayments can save you thousands in interest, and cut serious time off the length of your loan. For example, if you pay $500 monthly, it leads to $6,000 a year. If more frequent payments aren’t possible, try and add any lump sums you get your hands on (e.g. tax returns, inheritance) to your mortgage.
Get an offset loanInstead of receiving interest on your savings account, the interest payment due on the loan is calculated only on the net balance of the loan less the amount in your savings account. So, if you owe $600,000 but have $100,000 in your offset account, you’ll pay interest on $500,000. It all adds up.
Run a loan health check
Check in along the way to see if you’re getting the right loan for you. This includes looking at the fees attached to your loan, loan flexibility, the rate and the features the loan offers. If the loan isn’t helping you kick your finance goals, you might need to refinance. Remember rates change often so what once was a good deal, may not be so competitive now.
A mortgage is one long term relationship we all wish would end. For more tips on how to say goodbye sooner, speak to your Loan Market broker.