 Save on your interest payments
Most mortgage experts agree that while there may not be any 'magic pill' available to help you pay off your home loan faster, there are several strategies which, if implemented properly, can save you money and shave years off the life of your loan.
Paul Rybak is the Business Development Manager for financial company Men’s Flair. He believes that paying fortnightly instead of monthly is a golden rule, as well as making extra repayments above the minimum amount and watching those frills and benefits which can be costly.
“The more flexibility and features on your home loan the higher the interest rate you are going to be paying,” says Paul. “If you do not need all the bells and whistles the product offers, then it may be more beneficial to refinance to a cheaper product.”
As the interest on a home loan is calculated daily, the more frequently a home owner makes repayments, the less interest is paid. Mr Rybak recommends asking your lender if you can pay weekly or fortnightly instead of monthly.
He also suggests you increase your normal repayment by 10% to dramatically reduce the term and interest payable on the loan. By making extra repayments you begin to quickly reduce the amount of principal, which reduces the amount of interest payable.
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