Pay Your Home Loan Off Sooner
3 Easy Steps to Help Pay off your Home LoanPaying down the balance on your home-loan can be difficult, but there are a few simple things you can do to help you pay off your home sooner.
Pay Fortnightly (your monthly repayment divided by two)One of the easiest ways to pay your mortgage off faster is to pay fortnightly. But don’t let your lender work that figure out for you. Simply divide your monthly figure by two and pay that amount fortnightly. There are 26 fortnights in a year, so you will end up making the equivalent of 13 monthly payments for the year. This simple trick will knock years off your mortgage.
Pay more off your principle earlyThe first years of a mortgage are the hardest. It might even seem like all you are doing is paying the interest and the loan balance doesn’t seem to be coming down at all. Unfortunately, you would be right because this is the unfortunate effect of compounding interest. Getting stuck into the principle early is key to paying your home off sooner.
Every ‘extra’ dollar you pay off your mortgage (above your minimum payment) comes straight off your balance. This means that you will be paying less interest down the track. Extra lump sum payments and/or regular extra repayments could help cut years off your home-loan.
Look for a better dealIt goes without saying, the less interest you pay, the faster you can pay off your home loan. Most people don’t check their home loan often enough to know if they could be getting a better deal elsewhere. And others seem to be simply too loyal (or content) with their current bank to make a change. In reality, this could be costing them thousands (and years) when paying off their home loans.
The Broker Team is happy to review your home loan every year to make sure your current product is still suitable to meet your goals.