A generation of Australian home owners could be debt-free in record time with eight out of 10 borrowers ahead on their mortgage repayments, loans.com.au says.
“Interest rates are at unprecedented lows and our borrowers have been quick to make the most of that,” said Marie Mortimer, Managing Director of loans.com.au Pty Ltd.
“At this rate, they will have paid off their home loan faster than any generation of borrowers in Australian history.”
Loans.com.au customer data for February shows 82 percent of borrowers were ahead of their home loan repayment schedule.
“They are making the most of low rates to pay down the principal as much as possible and get ahead on their home loan,” Ms Mortimer said.
“Not only will they own their home sooner, they will have saved thousands of dollars in interest because the quicker you pay off your home loan, the less interest you pay.”
For example, paying an average of $50 extra a fortnight will save around $23,562 and three years off a home loan of $300,000.
“Many borrowers are using a mortgage offset as well to cut their interest bill down even further,” Ms Mortimer said.
It was an effective strategy to manage the possibility of future rate rises.
“There are some really competitive interest rates available right now, but they won’t stay low forever,” Ms Mortimer said.
“Borrowers who commit to an aggressive repayment schedule now, while rates are low, are giving themselves a buffer against rising interest rates later and cutting years off the term of their loan.”
Loans.com.au’s variable interest rates start at 4.23 percent p.a for the Dream Home Loan Essentials. For more information visit https://www.loans.com.au