23 November 2011
Our customers often ask us how they can pay off their home loan sooner. So we thought it would make a great topic for our blog.
Below are our best ideas to help get rid of that mortgage debt sooner.
1. Don't be lazzzzzzzy.
Far too often borrowers sit back and forget about their home loan once it has been setup. MyRate reviews our product range regularly and borrowers should so the same. Make sure you are still happy with the structure of your home loan – do you have the right features? Are you operating your home loan efficiently so as to minimise interest?
The simple message here is to conduct regular home loan health checks. At MyRate we believe this should be done at least once per year… it only takes an hour or so but the savings you achieve could be worth thousands.
2. Make additional lump sum repayments.
If you home loan has a free extra repayments and a free redraw facility, then you can always get access to any excess cash you have paid into your mortgage. As such, it is a really good idea to park this money in your home loan which will have the effect of “earning” you home loan interest rates on your money as opposed to the typically lower savings account interest rates on offer in the market. Also make sure you either pay any excess funds you receive directly into your home loan or if the money is initially deposited into another account, move it over as soon as possible, a few days here and there over the life of your loan add up to a big difference.
3. Increase your minimum repayments.
If you are able to pay more than the minimum amount of your repayments, then do so. This point works the same as point 2 above but relates more to regular repayments as opposed to occasional lump sum repayments (perhaps from birthdays, gifts, etc.). If you can add a few extra dollars to your regular payments, not only will you save interest, but you will also have some extra “rainy day” money sitting in your home loan should you have some issues meeting payments down the line.
