Ways On How To Save Big On Your Mortgage Interest

Ways To Save Big On Your Mortgage Interest

Did you know that for many Australians, buying a home is the most expensive thing they’ll ever spend money on!

When you own a home, you have to be responsible with your money. For 30 years, you’ll have to pay a portion of your monthly salary towards your mortgage.

When you borrow money to buy a home, keep this rule in mind: the longer you take to pay off your mortgage, the more it will cost you. In fact, there are times when the interest you have to pay on your home mortgage is more than the mortgage itself.

How do you know what’s right for you? It’s important to consider all aspects of your life before making such a big commitment.

So here are some strategies to save money and lower your home loan term:

Allow Extra Repayments

You’ll pay interest on the loan, which is usually the bulk of the total amount due.

Extra payments can reduce interest charges. You can achieve this by raising your interest payments or making lump-sum payments.

But before you even think about these, you should check with your lender to see if you can make extra payments and if there are any fees for doing so.

Adjust Your Payment Plan To Bi-Weekly Or Weekly

Changing your payment schedule from monthly to weekly or fortnightly is another easy way to pay off your mortgage faster and save on interest.

The basic idea behind the plan is that if you pay every two weeks or every week, you can pay an extra month’s worth every year. There are 26 fortnights and 52 weeks in a year. Together, these are equal to 13 months.

If you set aside $2,000 each month to pay off debt, you’d have spent $24,000 by the end of the year. Giving it $1,000 every two weeks would cost you $26,000 in a year. The extra $2,000 in reimbursement would help you pay off your mortgage faster and save you a lot of money.

Use Of An Offset Account

An offset account can do great things. Not only can it act as your savings account, but it can also help you pay less interest on your loan.

If you get a home loan with an offset feature, you’ll get a transaction account linked to your mortgage. The offset account works like a regular savings account. It lets you keep any extra money and gives you instant access to your money. You can get your cash anytime through phone banking, an ATM, or in person.

Why can you save your credit with an offset account? An offset account works like a high-interest savings account. Every day, you report how much money you have in it.

Refinancing Better Interest Rates

If you don’t have other choices, you can refinance your current mortgage to a better deal or switch lenders.

Borrowers often get a new lender when they refinance their home loans. But in some situations, you can talk to your lender to find out if you can refinance.


Are there any ways that are not mentioned above? Talk to us about it, and let’s discuss it!

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