Five ways to save on your home loan
Even if you’re happy with your current home loan, you can potentially save thousands on your mortgage with a few simple changes.
- Consider making more frequent repayments on your mortgage. Paying fortnightly instead of monthly means you’ll be paying the equivalent of an extra month’s repayment each year, which can make a huge difference over the lifetime of your loan
- Make additional repayments whenever you can, whether it’s a small amount each month or a lump sum payment such as a tax return, bonus or other financial windfall. This can help reduce your home loan balance, particularly at the beginning of your loan, when the principal is highest and you pay the most interest.
- If interest rates fall, continue making the same repayments on your mortgage. Not only is this a great budgeting tool, but you’ll get a headstart on your mortgage and reduce interest repayments
- Pay your salary or other income directly into your loan account. With a mortgage offset account, you can reduce your loan balance, save interest and build equity in your home.
- Consolidating debts into your mortgage can help you save on interest and fees, as the interest rate on home loans can be lower than personal loans or credit cards. However, it can also increase your loan term, so it’s a good idea to first see if this is the best option for you.