The beginning of a new year is the perfect time to consider how you can pay off your mortgage faster, and perhaps even save thousands of dollars.
Here are 3 tips to help you tackle your mortgage faster this year.
1. Check mortgage health
The first step when looking into how you can pay off your mortgage faster includes investigating into your mortgage health.
A recent survey commissioned by Mortgage Choice found that of from a sample of 1000 Australian homeowners, 60.5% of borrowers between the ages of 30-59 admitted to not knowing the interest rate of their home loan.
Susan Mitchell, Chief Executive Officer at Mortgage Choice suggests that if you are unaware of your interest rate, the likelihood your rate too high.
Simply reviewing your mortgage specifics such as your mortgages interest rate could potentially lower your repayment costs, resulting in paying off your home loan in a shorter amount of time.
Depending on the scenario, refinancing may be even the best option for you. To read more about refinancing click here.
2. Catch up on repayments
The year 2020 took a financial toll globally with the pandemic causing thousands of Australians to lose employment.
Because of this, many Australian homeowners are either behind in their mortgage payments or were forced to ‘pause’ their home loan payments.
This year will be a very important year for many Australian’s to play catch up on their repayments.
Catching up on repayments may require strict budgeting such as eating at home more to save money on eating out less.
3. Make additional repayments when possible
Another way to speed up the repayment process is to make extra repayments whenever possible.
If you can afford to contribute extra repayments, you could potentially save thousands by the end of your loan term.
For example, let us say you have a $400,000 mortagge paid over 30 years at an ongoing interest rate of 3.31%. If you contributed an additional $100 every month, you would save $8,735 of interest by the end of your loan term.
This is money which could be used to renovate the home, adding value to the property.
How we can help
Finance Mutual Australia is a market leading South Australian mortgage broker with over 20 years of experience in the business. Whether you’re looking for a loan to buy your dream home or review your current existing mortgage, we can help. Contact us today to find out how we can help you.