For past decades Australian home loan interest rates have remained quite low. As a result, the opportunity for paying off a mortgage faster has increased gradually.
Used in conjunction with low rates, here are some important steps that can speed up your home loan repayments.
Make A Higher Repayment
Making a larger loan repayment is quite an easy way to quickly reduce the burden off your shoulder. The minimum repayments required on a loan are calculated on the amount owing and the prevailing home loan interest rate. Repaying more than the minimum can cut the overall tenure of the loan and help you pay your debts off quickly.
Make Fortnightly Repayments
In order to pay off repayments quickly, you can go for fortnightly repayment. This means you are paying the equivalent of half of your monthly repayment every two weeks. This helps you make the equivalent of one extra monthly repayment per year. Extra repayments will ensure the loan balance is lower at the time of the month the interest is calculated.
Go For Lower Rates
Although obvious, many borrowers take out a mortgage and then stop following the home loan market. With interest rates constantly changing, it pays to monitor the latest rates. If rates go down, contact your lender or broker and ask if they can reduce the rate on your loan.
Home Equity
As home prices rise, you build more equity in your property. Re-drawing funds from a home loan to pay for renovations and other costs can be a much cheaper source of funds than others.
For more information on how you can pay off your home loan sooner, contact your mortgage broker.
Regards : www.winningwealthfinance.com.au