After the very recent interest rate rise here in Australia I have decided to do a series of tips on home loans to help people save a few dollars off their home loan.
Tip 1 - Additional repayments
If you can still afford it after the recent rate rise making additional repayments is still a great way to reduce the term of your loan and total interest paid.
For every $1 in extra repayments you make, you will saves around $2 in interest over the term of the loan.
You can do this in two ways
- One off lump sum payment when you have some spare cash like at tax return time.
- Increasing your regular repayment amount (even a slight increase will help!)
Before doing this though you must make sure that your loan allows you to make additional repayments without penalty or fees and charges. Some basic (or low-doc) loans often have restrictions on extra repayments. Check with your financial institution.
0 comments:
Post a Comment