It doesn’t have to take 30 years to pay off your loan
It is very rare that people buy their first home as young adults and live there for 30 years at which time they finally repay their home loan. With changes in careers and family come changes to your homes and needs. Often as we get older we purchase bigger homes and take on more debt. We don’t want to be getting a 30 year mortgage at age 45 and having to work until 75 years of age to pay it off! There are many aspects to consider that are individual to each and every one of us and your broker can help you plan and prioritise to repay your debt as quickly as possible, gain wealth and live life!
There are several ways you can reduce the time it takes to pay off your loan and reduce the interest you pay.
Here are some very simple money saving tips to help you pay off your mortgage sooner:
- Divide your monthly payment by two and pay this amount every fortnight – this will mean you are paying an additional month’s repayment every year and can easily take up to 4 years off your loan term and save you thousands in interest.
- Use bonuses and lump sums to pay your mortgage down sooner
- Consider using an offset or revolving credit account – talk to your broker about the benefits of this.
- Talk to your broker about a home loan health check and refinancing as there may be a lower rate available that would suit your circumstances and you could save thousands.
- Increase your loan repayments – on a $450,000 standard variable loan over 25 years, if you increase your monthly repayment by $100 (the cost of a daily coffee) you could save an estimated $33.5K in interest and nearly 2 years off your loan term.