It’s no secret that most people strive to pay off their home loan as quickly as possible. As one of the biggest investments you can make in your life, as well as one of the largest debts, your mortgage is a bit of a weight on your shoulders. Luckily, we’ve got 3 ways that can help to pay off your home loan sooner, without having to sacrifice your lifestyle:
1. Make frequent payments
By making repayments more frequently, such as fortnightly rather than monthly, you can significantly reduce both the length and cost of your home loan. It may sound too easy, but by paying every two weeks instead of every four, you are making an additional payment each year, which can really make a difference over the course of your mortgage. You’ll build equity in your home faster, pay off your loan sooner and save on interest!
2. Put lump sums into your mortgage account
If you receive a lump sum payment over the course of your mortgage, such as an inheritance, work bonuses, dividends from other investments, or tax refunds, put the funds directly into your mortgage account as soon as you receive them. You’ll save on interest, as a lump sum payment can reduce your interest payments significantly over the years. Even if you aren’t expecting or don’t receive any lump sum payments over the course of your mortgage, making extra payments whenever you can will also help in the long run.
3. Perform a finance health check
If you’re a few years into your mortgage, it may be worth doing a finance health check on your home loan. The best loan for you when you first bought your home may not be the best one for you today, as your needs may have changed over time. To see how your loan could be revamped, fill out our Finance Health Check form here to see what we can do to help you!