Are you looking to pay off your mortgage sooner? Then take a look at these six helpful tips.
1. Align your mortgage repayments with your income
If you get paid fortnightly then you should be making your mortgage payment fortnightly as opposed to paying monthly. This will cut down the payable interest over the life of the loan.
2. Increase your repayments while rates are stable
This one may seem obvious, but by increasing your mortgage repayments by as little as $20 on each payment while rates are stable, it can mean taking years of interest off in the long term.
3. Transfer lump sums into your mortgage account
Transferring lump sums such as a tax refund, work bonus or dividends from other investments into your mortgage account can help to cut years worth of interest over the life of the loan
4. Offset your loans with a savings account
By placing your savings into a mortgage offset account is another effective saving tip, whereby that amount is then subtracted from the interest payable on your loan. For example, if your loan is $300,000 and you have $100,000 in savings, you only pay mortgage interest on $200,000 – greatly reducing the amount of interest payable.
5. Have your wages paid into your offset
Because interest is charged daily, by having your wages paid into your offset account, you could save up to a few hundred dollars in interest every year. Although it doesn’t sound like much, it all adds up over a 25-30 year mortgage span.
6. Perform a mortgage health check
It’s important to check your home loan at least every year, and in some cases it may be beneficial to re-finance your existing mortgage with a different one. Reach out to one of our experienced ChapterTwo consultants today and test the health of your mortgage.