The longer you take to pay off the principal amount of the home loan you’ve borrowed for, the more interest you will end up paying – it therefore makes sense to try and put a dent in your mortgage as quickly as possible.
Mortgage reduction is much easier and less painful than most people think, and with a few simple steps you’ll be sure to drive your mortgage down.
Review your home loan
Banks, Building Societies and Non Bank lenders are now offering heavily discounted lending packages to win over your business.
Ensuring that your home loan still offers a competitive interest rate could save you thousands of dollars over the short, medium and longer term. However be sure to give us a call for advice on the most appropriate product for you and any fees or costs that are associated with switching before jumping ship.
Increase your mortgage repayment frequency
Changing from monthly to fortnightly repayments is the safest and most effective mortgage reduction strategy.
By paying fortnightly you are effectively making a total of 13 monthly repayments over the course of a year, giving you one month’s extra repayment every year.
At first glance this figure may not seem significant but you could essentially wipe more than 4 years of the life of a 25 year loan term and save tens of thousands of dollars should you engage this simple strategy.
Make lump sums
Whether you’ve just received a tax rebate, Christmas bonus or an inheritance, use every opportunity to drive down the principal amount of your mortgage. The more cash you drive into your mortgage, the earlier you’ll repay your loan.
And remember, if necessary, you can usually release any additional repayments from your home loan if you have to unlock those extra dollars at some stage in the future.