For most people, their home is their biggest expense and the sooner you can pay down the debt, the better off you’re going to be financially.
Fortunately, there are a number of things you can do to cut years off your mortgage this year.
Get a lower interest rate
A lower interest rate isn’t just a number on paper – it’s a direct pathway to paying less over the life of your loan. While the idea of refinancing might initially seem like a substantial undertaking, the long-term financial benefits are something that you need to review regularly with your mortgage broker. However, refinancing isn’t the only option. Negotiating with your current lender and asking them to match the interest rates offered to new customers can yield similar benefits.
Make more frequent repayments
Changing your repayment frequency from monthly to fortnightly might appear a small change, but it can make a significant difference. By opting for fortnightly repayments, you end up making an additional month’s payment every year without straining your budget. This small adjustment accelerates your repayment schedule, bringing you closer to your mortgage-free goal.
Consider making extra repayments
Windfalls, such as work bonuses, tax refunds or inheritances can serve as important opportunities to make additional payments towards your mortgage. The beauty of this approach lies not only in shortening your loan term but also in reducing the overall interest paid.
Open up a redraw facility
While making extra repayments is important, there might be times when you need that money back. A redraw facility addresses this issue by pooling additional repayments, allowing you to access these funds when necessary. Although some lenders may charge a nominal fee for withdrawing funds, this feature can prove invaluable when financing renovations or handling unexpected expenses without erasing the progress you’ve made.
Put your savings into an offset account
An offset account is a financial tool linked to your home loan balance. It works like a transactional savings account by enabling you to withdraw funds for everyday expenses. The funds in your offset account directly reduce the interest charged on your loan principal, leading to potential savings.
Decrease your loan repayment term
As your personal circumstances evolve, so should your loan repayment term. If you find yourself in a more comfortable financial position, consider reducing your loan term – for example, from 30 years to 25 years. To make this feasible, you’ll need to increase your minimum monthly repayment. If this adjustment fits comfortably within your budget, the benefits are significant – you can end up paying off your loan years earlier with substantial interest savings.
If you are thinking about ways to reduce your mortgage quickly, please make sure to get advice BEFORE doing anything further – it’s good insurance against costly financial mistakes.
Contact our experienced Team on 03-55612643 to get the peace of mind knowing your mortgage is more manageable and under control.
Have a great day!
General advice disclaimer
The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product. Only lending advice provided by Ceebeks Financial Solutions is associated with Outsource Financial Ltd Credit Representative 396061. Chris Beks is a director of Ceebeks Financial Solutions and a Credit Representative (credit representative no. 396061) of Outsource Financial Ltd Limited ABN 42 131 090 705; Licence Number 384324 an independently owned and operated Aggregator, and is authorised to provide personal credit advice. For more information, you can read our Credit Guide, or contact us for more information on our available services.
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