Paying down your mortgage quickly, for example, has several advantages. If you want to buy your first investment property in four or five years, you can easily utilize this equity to buy your first investment property, or if you’ve always wanted to buy your dream house, you may use this equity to buy your dream home. A lower home loan balance has several fantastic advantages. So, here are 4 easy ways that anyone can use to pay off their mortgage faster:
- Setting up a bi-weekly repayments or a fortnightly repayments
If you pay once a month, that works out to a total of 12 payments.
If you make a payment every two weeks, that works out to 26 payments over the course of the year. By converting from monthly to biweekly payments, you’ll save thousands of dollars in interest and shorten the term of your house loan by a few years, depending on the loan size. That’s an excellent method to begin repaying the loan. You can still do it if you are paid monthly; all you need is a plan. You must ensure that you have a little amount of financial discipline.
- Have an offset account
Having an offset account with your home loan can can save you thousands of dollars in interest payments. If you have a AU$400,000 home loan and a savings of AU$50,000, you can transfer that savings to your offset account and only pay interest on the balance, which is AU$350,000, saving you a lot of money in the long run. So it’s a great tool that anyone can utilize to effortlessly save money while also helping you minimize your loan’s interest rate and paying it off faster.
- Make a lump sum payment
You may receive a bonus at the end of the year or quarterly bonuses throughout the year, as well as a tax refund, which you can use to pay off your mortgage. Say for example, if you sold all of your household furniture or a car that had been sitting in the garage, you might use the proceeds to pay off your mortgage. Whether it’s AU$50 or AU$500, everything you put toward your mortgage over and beyond your minimal payments will benefit you in the long term. By building a habit of paying extra towards your mortgage, you can pay off your home loan faster.
- Refinance
Refinancing is a great tool because it can save you hundreds of thousands of dollars in interest and help you pay off your home loan much faster if you refinance with a lower interest rate. When you refinance, you only need to be sure of a few things: you don’t want to stretch your house loan out to its maximum level, you want to make sure that you keep it as it is or maybe reduce it depending on your circumstances. You want to make sure that you got the right product and right interest rate for your home loan.
Speak to one of our mortgage brokers to provide you the best product for your home loan. You may contact us at contact@ozbroker.com.au
