Save $100 000 on your mortgage / OCR has increased again
Along with the expected news of the OCR increase this morning I thought it would be valuable to share with you a technique for saving money this month.
Highlights of this month’s newsletter
- OCR increases by 0.25%, to 3.25%, which is an increase of 0.75%, over the last 3 months
- Save $100 000 in interest by paying down your mortgage faster
We’ve seen another OCR increase this morning which is now the 3rd successive increase in a 3 month period. They’ve certainly been shaking things up, and the expectation is now that the Reserve Bank and Graeme Wheeler will sit back and monitor the effect of these increases. Therefore, personally, I don’t think we’ll see any more increases over the next 2-5 months. As always, give me a call if you would like to fix some of your rates as we can negotiate rates on your behalf.
Save $100 000 in interest
Sometimes I romantically imagine that I’m in the business of realising people’s dreams. After all, I assist people in obtaining mortgage finance that suits their needs so that they can buy their dream home for themselves or their family. But realistically the home / property doesn’t belong to them until the debt owed to the bank (i.e. mortgage) is paid off. Thus today I would like to focus on one simple tip to reduce your mortgage quicker, and enable you to own your property outright – the real kiwi dream!
Money saving tip
My message is simple: Pay a little more and save a lot. If, for example, you were able to stop buying the odd coffee or lunch, then you might save $40. If you then used that extra $40 per week on your mortgage, that would save you $100 000 in interest, and cut your mortgage term by 5 years. That’s very valuable coffee that you’re drinking!
Note: Numbers based on a 400 000 mortgage over a 30yr mortgage term at an average rate of 6.5%.
Get in touch with me, and depending on which bank you are with we can either arrange for your mortgage payments to be increased, or you can initiate an automatic payment to a floating account on your mortgage. I find the simplest way to set it up to get the bank to deduct the funds automatically as then it gets done each and every month. Each bank and lending institution is different though, so get in touch and I’ll help you achieve these savings.
Calculate your own savings
Use the link below to calculate actual figures based on your own mortgage and amount of funds you have to contribute. It’s amazing how a little can quickly save you a lot. Even just a $5 per week payment would save you $17 000. Create your own plan and goal so that you can stop being in debt to your bank!
Calculate your savings https://www.loanmarket.co.nz/nick-kotze/calculators/extra-mortgage-repayments
Do you have any great money saving tips that you’d like to share? If so, please send them through for me to share with our readers.