5 ways you could save on a mortgage
Whilst every situation is different, here are some common ways you could save on your mortgage.
Set up an offset account. The amount in this account is deducted from the amount you own on your mortgage – so you end up paying interest on a smaller amount. Use our offset calculator to see how much time and interest you could save on your home loan.
- Make fortnightly payments. You’ll pay off slightly more than what’s needed each month, which will equate to an extra payment per year. Our extra repayments calculator can help you understand how much you could reduce the time it takes to pay off your loan by making extra repayments.
- Round up your payments. Let’s look at an example. 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. If you round each payment up to $1,440 – just $7.75 more a month – you’ll save over $2,500 in interest and reduce your term by three months.
- Get a redraw facility. You can make extra payments but still withdraw money (in advance extra payments) if you need quick access to it.
- Refinance. If there’s a better deal out there, it’s worth looking into. Just make sure you get a breakdown of all the costs and associated fees.