While it’s tempting to use the extra cash for life’s little treats – particularly over the festive season – you could save thousands over the long term by paying down home loan debt while interest rates are low.
You don’t need to make big sacrifices to make a big dent in your long term mortgage balance. Siobhan Hayden of the Mortgage and Finance Association of Australia shared these top #5 tips with Domain.
- Make smaller payments more often. If you pay $1200 fortnightly instead of $2400 monthly, you will pay off $31,200 in a year compared to $28,800.
- Pay just a little more than the minimum repayment – even if it’s an ad hoc contribution.
- Don’t decrease your repayments when interest rates fall so you pay off more of the principle.
- Use an offset account to decrease the interest payable.
- Shop around for a better deal with the help of a broker.
Read the full story on Domain.