Managing editor of Your Money Magazine Jackie Pearson says it makes sense to reduce your home loan as quickly as possible.
“A mortgage is probably going to be the biggest financial commitment you will make in your life – don’t let it be a ball and chain that weighs you down for years,” says Pearson. “There are simple steps you can take to pay off your mortgage faster so you have the security of owning your own home and are free to spend your hard-earned money on other things.”
Your Money Magazine’s tips to save on your mortgage include:
• Pay more each month – Find the home loan with the most competitive rate then add a bit extra to your monthly repayments. Just $50 extra a month can save you over $36,000 on an average 30-year loan and means you will pay off your mortgage 1 year and 9 months sooner
• Make lump sum payments – Don't waste that Christmas bonus, put it towards your mortgage and make a real impact on the interest you pay. A $50,000 lump-sum payment could mean you save close to $200,000 in interest and cut 8 years off your mortgage
• Beware too-good-to-be-true offers – Lenders are being really competitive at the moment and offering all sorts of honeymoon rates and other sweeteners. But a mortgage is a long-term financial commitment so make sure you look at the total cost over the life of the loan before signing up
And while the big banks have all announced they will drop their interest rates in line with the latest RBA decision, Your Money Magazine suggests keeping repayments at the same dollar level and using this period to make a dent in your home loan – you never know when interest rates might go up again.
For more tips on how to save on your home loan and other information on making smart spending and investing decisions, see the latest issue of Your Money Magazine. On sale now at local newsagents or online at www.yourmoneymag.com.au.
Your Money Magazine
Your Money Magazine is for all Australians looking to increase their personal wealth and achieve the lifestyle they desire. Your Money Magazine’s key focus is to educate the Australian public about money management by providing down-to-earth, easy to comprehend content, detailed product comparisons across a range of categories, and recommendations from some of the country’s leading industry experts.
Combining in-depth research and product comparison tools with shrewd financial education materials Your Money Magazine takes a unique place in the Australian market allowing readers to not only compare existing products but to educate themselves and take decisive action all in one place.
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