$10.4 billion is in the mail today. The Federal government's one-off hand out to Australian families is handed out today, hoping to boost the economy and increase consumer confidence.
But while the government wants us to spend the bonus, and put the money back into business to help the economy and to prevent Australia from slipping into a recession, many who receive the bonus will be saving instead. Home owners may be prefer to put the cash towards the mortgage rather than aquire new toys.
A $300,000 loan at 7 percent over 25 years will see you pay $336,101 in interest. If you put just $20 extra per week into the loan on top of your required repayments, you'll save $23,000 in interest and knock 3 years off the length of your loan. If you can stretch that to $100 per week, you'll save $85,000 and 7 years.
Don't have a home loan? Consumers with credit card debts or an overdraft would see the benefit of using the extra money to pay off these debts and save in interest payments. The bottom line is, the government wants us to spend, to help business and save jobs, as increasing un-employment figures worry the government. However home owners may see more benefit in paying off the mortgage.