Your mortgage is likely to be your largest expense, remaining so for most of your life. Month after month, year after year, you pay towards owning your own home, so it makes sense to give your mortgage a bit of thought.
• Regularly check your rate of interest together with your loan options and conditions. Mark this in your diary and do it, as a little saving on interest can mean thousands saved over the life of your loan.
A saving of 1 per cent on a loan of $500,000 over 30 years is more than $300 per month. That’s a huge saving you can do it!
• Can you put an extra $10 or $20 each week into your loan? Is there something you can cut down on or an expense you can trim? How about adding in any salary increases? Any one of these measures can cut years off the life of your loan.
Forget to try to pull together larger lump sums; a little and often is a better habit. It’s not only easier but more efficient and effective on your mortgage.
An extra $100 paid into your loan each month could have it paid off two and a half years earlier. That’s also a saving of almost $85,000 that you don’t have to earn. It’s like free money in the bank!
• Putting together both of the above gives an astonishing result. A rate reduction of 1 per cent and an extra $100 put into your loan each month means you have an unbelievable saving.
Almost eight years off your mortgage with monthly repayments of $3,260. This is a saving of just over $275,000 in total repayments! It’s a huge accomplishment care and it’s perfectly possible with care, attention and expense watching. Manage your mortgage and you’ll feel like you’ve won the lotto.
• Don’t borrow too much! It’s the most common piece of advice because it’s the most common important. You don’t want to have the excitement of home ownership turn into a nightmare when you discover the repayments to be out of your reach. If you do have a problem, act fast –it won’t go away by itself.
Feel free to talk to some of the leading mortgage brokers in Australia or call Yellow Brick Road Castle Hill for more information.