5 ways to save on your mortgage
Depending on what your needs and requirements are the following tips could help you save money off your mortgage. Think about what is best for you, and remember you can always call us to discuss these options.
Put your income in an offset account. The amount in your offset account is deducted from the amount you owe on your mortgage, so you pay interest on a smaller amount. If you have $5,000 in an offset account on a $300,000 loan at 4.00% p.a. this could save you over $11,000 in interest over a 30-year loan term.
- Make fortnightly instead of monthly repayments. You’ll pay off slightly more than is required each month, equating to an extra payment per year. If you have a $300,000 loan at 4.00% p.a., paying fortnightly would save you over $33,0001 in interest and take over four years of the term of the loan
- Round up what you’re paying. If you have a $300,000 mortgage with a 4.00% p.a. interest rate and 30-year term, your monthly payments will be $1,432.251. Round each payment up to $1,440 – just $7.75 more a month – and you’ll save over $2,500 in interest and reduce your mortgage term by three months.
- Get a redraw facility. This allows you to make extra mortgage payments but still withdraw the money if you need quick access to funds.
- Don’t let refinancing costs necessarily put you off. If you find a significantly better rate at a different bank, it can save you thousands over the term of the mortgage. Get a breakdown of all fees to work out if it’s worth your while.