Mortgage experts all agree that one of the best ways to repay your home loan quicker is to make extra repayments, and pay more frequently.
Chris Acret, Smartline Personal Mortgage Advisers managing director, offers advice during these interesting economic times.
His top tip is to start making more repayments early on in the loan, particularly when other large financial commitments may still to be coming up, such as considering starting a family later on.
"This will create a buffer that can allow people to suspend or lessen payments should the need arise."
"You wouldn’t want to pay nothing for very long because the amount owing on your loan would just keep growing and you’d be going backwards," he remarked.
The Mortgage and Finance Association of Australia (MFAA) recommends that home owners continue to make higher loan repayments even when rate are being cut. Take advantage of lower interest rates: instead of lowering your repayments because the interest rate has dropped, pay off the loan at the same amount, and pay off the loan faster as the loan total reduced quicker. By paying more than the minimum required you quickly reduce the principle.
MFAA chief executive Phil Naylor suggests that unless you are experiencing financial difficulty, mortgage holders should continue making higher loan repayments and can pay off their debt sooner rather than later.
And, watch out for costly frills and benefits which you may not use.
|