Paying off your mortgage faster is a smart financial goal, and there are several strategies you can employ to achieve it. Your Brisbane Home Loans Specialist is here to help you navigate these options and find the best solution for your situation. Regular home loan reviews can save you money and set you on the path to financial freedom.
- Pay a lower interest rate and fewer fees Let your Brisbane Home Loans Specialist find you the best interest rate combination with low or no fees. We perform regular home loan reviews for our clients to help you save on your home loan costs.
- Pay Extra From the day you set up your home loan, consider increasing your payments by $50 or $100 a fortnight or month. By starting this from the beginning, you won’t even notice the difference, but it will significantly reduce the time it takes to pay off your mortgage.
- More frequent repayments Interest is calculated daily, so making more frequent payments can reduce your overall interest expenses. Opt for fortnightly or weekly payments to minimize your interest costs, as interest is calculated based on your current balance.
- Consolidate debt If you have enough equity in your home, talk to us about rolling your other debts into your home loan. Many lenders offer this option in a separate split and over a shorter term. This provides you with mortgage rates for your other debts. Continue paying the same combined amount you were paying on those debts directly onto your home loan to pay them off quickly and save on interest.
- Using an offset account A 100% offset account is a savings account that doesn’t earn interest, but it reduces the interest you pay on your home loan by the balance in your offset account. This is more beneficial than earning a small amount of bank interest on your savings.
- Make extra repayments Deposit every lump sum of cash you receive directly onto your home loan to see the balance decrease rapidly.
- Fixed or Variable Home Loans Fixed home loans offer payment security, especially when interest rates are low, but variable home loans provide flexibility for making extra payments. If you have a fixed rate, check with your lender about their policy for extra repayments to avoid triggering rate cancellations.
- Keep paying the higher payment even if rates fall Maintaining higher payments, even when interest rates drop, will help pay down your loan sooner.
- Decrease your loan term If you’ve been in your home for a while and are financially stable, reducing your loan term by several years can encourage faster repayment.
- Consider refinancing As part of your annual home loan review process, your Brisbane Home Loans team will ensure you’re always on a competitive rate and have the lowest overall fees, especially if you’re on a variable rate.
By implementing these strategies and staying in close contact with your Brisbane Home Loans Specialist, you can take control of your mortgage and work towards paying it off faster. Your path to financial freedom begins with smart financial decisions.
