Weekly or Fortnightly payments are better than monthly repayments
Since interest is calculated daily, when payments are made more often you save money in interest over the life of your loan – which means the loan is paid off quicker!
Review your finances every year, including your home loan
Changing financial priorities and new products in the market means your current home loan may not be right for you now. Give your home loan a “health check” by reviewing the different features it has including the interest rate and whether it’s fixed or variable, any fees payable as well as fees incurred by switching to a new home loan and finally, check any other features that may be available on your particular home loan and compare these to what other lenders are offering (redraw facility, offset account, additional repayment flexibility). Remember, if you need help your mortgage broker will be able to assist.
Extra lump sum repayments
Got some extra cash available, maybe from a tax refund? Paying a lump sum off your mortgage can reduce the total interest paid on the loan.
For example, you could save over *$12,000 if a lump sum of $5,000 is paid on a loan of $300,000 within the 1st year (*This is an estimate only as various factors are involved in calculating extra repayment savings. Please consult your mortgage broker for assistance). See our repayment calculator HERE
Loan statements need to be checked regularly
not everyone is perfect, sometimes the banks make mistakes too. Check your statements at least each quarter to make sure all is on track.
Have a budget and a financial plan
as Benjamin Franklin once said, “failing to plan is planning to fail”. Where do you want to be in 5, 10 or 20 years from now? Mapping out your financial future ensures you can make better financial decisions helping you to stay on track and meet your financial goals.
Can you add extra $$’s to your regular repayments?
On a $300,000 loan at 5.25% over 30 years you could save over *$42,000 over the life of the loan if you make an extra payment of just $50 a fortnight (*This is an estimate only as various factors are involved in calculating extra repayment savings. Please consult your mortgage broker for assistance). See our repayment calculator HERE
When interest rates go down, keep your repayments the same
This has the same effect as making “extra repayments” with almost no effort on your part. When interest rates go down then your interest payable will go down too, so if you keep making the same repayments instead of an adjusted repayment to suit the new interest rate, then you will effectively be paying extra off the loan. This will reduce your interest bill which shortens the life of your loan.
Refinance (change lenders) if you can save money
Refinance to a lender that will give you a better deal and save you thousands. Loyalty and banks are a thing of the past. Saving money must be your priority.
Bird and Young provide a range of loan solutions including home loans, business loans and loans for special financial circumstances. Plus, we offer a free credit report and a free financial assessment without listing anything on your credit file. Call us today on 1300 469 667 or visit birdandyoung.com and find out how we can help you achieve your financial goals.
Disclaimer: Content is not intended to imply any recommendation about any financial product(s) or to constitute tax advice. If you need financial or tax advice you should consult a licensed financial or tax adviser. The information in the article is believed to be reliable at the time of distribution, but neither Bird and Young nor its accredited brokers warrant its completeness or accuracy. For information about whether a non-bank loan may be suitable for you, call us on 1300 469 667