Did you know that if you have a home loan of $400,000 and pay the minimum principal and interest repayments (6.57%pa), across the 30 year loan term, the total interest on top of your loan is $516,817, that’s a huge amount!
What if you paid it off in 25 years and pay the minimum principal and interest repayments (6.57%) the interest payable would be $415,505, a little better than 30 years, but still it’s a lot.
The great Australian dream is to pay off your home loan and be debt free, but it all seems a little hard, right?
At the wHeregroup, we say a game plan is a great starting point, but here is some other ideas to keep you inspired;
- Pay your mortgage fortnightly. Doing this cuts down on added up interest and will save you ALOT of money over the course of your home loan. If you are super game, pay your mortgage weekly
- Pay a lump sum twice a year. If you were to get money back from your tax return, make a large payment towards your mortgage. These large lump sums cut years of interest off your loan.
- Increase your repayments. You can cut up to 2 years off your loan by paying an extra $20 to $50
- List your regular expenses and find 1 or 2 objects to remove from your life
- Take a loan that enables an offset facility, this allows any savings to offset the interest payable on your loan
For those who are yet to have a home loan, START SAVING MONEY! The rule of thumb is that you need 10-15% of your house loan to deposit
- Sometimes you just have to admit your loan is bad. You got done and need to find a new one ASAP, this is called mortgage refinancing. Speak to a finance broker @ the wHeregroup and get them to do the hard work for you
- Purchase an investment property in a researched area that will grow in value, then sell the property in the peak of the market and pay down the mortgage with the profits made. This option is for the aspiring consumer, and the type of client the team @ wHeregroup regularly assist.
All of the above are simply options available to you, and this will depend on your individual circumstances. The opportunity for you now is to begin devising your “game plan” so you can be home loan debt free sooner!
Like to know more?
Contact us to arrange an obligation free consultation.
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