Paying off a mortgage as quickly as possible reaps many benefits. By leveraging some simple savings strategies you can reduce the term of the loan and the interest you’ll pay.
We all do it. Unplanned purchases and impulse buying can seriously affect your financial health. Just by simply preparing a budget shows how much can be saved with a little planning.
Pay lump sums off your mortgage
Instead of pocketing your tax return or work bonus, consider putting it directly against your mortgage. Every dollar over the repayment amount bites into your principal, which reduces the interest payable.
Don’t be complacent about direct debits and insurances
Every year, do a health check of your insurances, including car, home and health, and promptly cancel subscriptions, like a long forgotten gym membership.
Don’t forget to check your current loan/mortgage rate. Banks are very competitive these days.
Sell it rather than dump it
With online selling now the norm, there’s no excuse for throwing out an old couch or TV. Take some photos, put it up for sale on online garage sale sites like Gumtree or eBay, and make a little bit of extra cash to throw onto your loan.
Stamp out your debt
Debt kills your financial momentum. While you may be paying 5 per cent interest on your home loan, you could be forking out up to 20 per cent on your credit card or car loan. Forget extra repayments on your low-interest mortgage until you’ve stamped out your high-interest debt.