7 December 2011
It is remarkable how little changes can make a huge difference.
Did you know that changing your repayment frequency from monthly to fortnightly could get you ahead on your loan and save you thousands of dollars in interest !
Since interest is generally calculated daily on your loan, when you pay your off your loan more frequently, it reduces the loan amount which therefore reduces the interest.
In addition because there are 26 fortnights in a year, by opting for fortnightly repayments, you end up making an extra monthly payment per year and pay off your home loan faster.
You can choose this option for both a fixed or variable loan.
Another little thing you can do is pay off a little bit more than your loan minimum repayment every month or every fortnight.
MyRate reviews its interest rates according to the official cash rate regularly.As we just found out that the Reserve Bank has cut its cash rate for the second month in a row which will most likely result in a drop of your loan interest rate, you should consider maintaining your repayment to the same level which will again enable you to pay down your mortgage faster and in turn shorten the life of your loan.
The MyRate Team / Celine C.
