The vast majority of home loan customers are ahead on their mortgage repayments according to data from market leading online lender loans.com.au.
Loans.com.au Pty Ltd Managing Director, Marie Mortimer, said recent data showed 82 percent of loans.com.au’s customers were ahead of their repayment schedule.
“That reinforces what we know about our borrowers; they are financially astute and know the value of a low home loan interest rate,” Ms Mortimer said.
“They are making the most of low rates to pay down the principal as much as possible and get ahead on their home loan.”
This strategy would serve them well in an environment of higher interest rates.
“Interest rates are at record lows but they won’t stay that way forever,” Ms Mortimer said.
“Paying down the principal of their home loan is going to give these clever borrowers a buffer against rising interest rates if and when the RBA lifts the cash rate.”
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
An aggressive repayment schedule would also cut years off the term of the loan. Paying an average of $50 extra a fortnight will save around $23,562 and three years off a home loan of $300,000.
“It’s no secret that the quicker you pay off your home loan, the less interest you will pay,” Ms Mortimer said. “A low interest rate means these borrowers will own their home and be debt-free sooner, having saved thousands of dollars in interest.”
Ms Mortimer said loans.com.au customers had accessed a range of options for making headway on their home loan.
“Most of our customers use a mortgage offset very effectively by having their salaries paid directly into their offset to minimise the interest they pay,” she said. “They make extra repayments as often as they can because they recognise that every dollar they can pay off now will save them time and money off the term of their loan.”