Friday 05 June, 2020
A common misconception is that there is no difference when you make your repayments, but there are in fact a few hidden benefits to paying more frequently.
Both weekly and fortnightly repayments are better options than monthly. In fact, since interest is accrued daily, the more frequently you make your payments, the more you could save in interest over the life of your loan.
Paying fortnightly actually increases your repayments without you even knowing, effectively making twenty-six fortnightly payments which equals thirteen payments per year, rather than twelve.
Another option to consider would be to pay a little extra on top of your required minimum amount. For example:
If you have a $300,000 mortgage with an interest rate of 2.8% over 30 years, the total amount you will pay is $443,766. Your minimum weekly repayment would be $285, and your monthly minimum would be $1232. If you increase your repayments by $50.00 per week you will save a total of $22,638.00 in interest.
Also, next time you’re making a payment, take a look at your interest rate. Over the last few months we have helped many clients bring their minimum repayments down by lowering their rate.
If you have any questions about your repayments or need help with your interest rate get in touch - it would be our pleasure to help!
When you take out a home loan there are a few options you can choose to make repayments more manageable. However, choosing a financial institution and interest rates aren't the only things you need to consider. It’s also important to look for eligible home loan options which can reduce your interest repayments and give you flexibility to pay off your home loan sooner.
Buying a house is likely the biggest investment you will ever make. Over the last three years, Tasmania has seen record rises in real estate prices meaning saving for a deposit to get your start in the property market is no small task. Recently released statistics show that almost 60% of first home buyers rely on help from the 'bank of mum and dad' when buying their first home.
Refinancing your home loan could be a value saving option if you're looking to access additional funds. With housing prices rising so dramatically over the last couple of years, existing homeowners have the opportunity to access the equity in their home to spend on things like home improvements, debt consolidation, buying a new car or another large ticket item such as a caravan or motorbike. You could even help your child break into the housing market!
A reverse mortgage is similar to a home loan but without the need to make regular payments. It gives people living on a pension or fixed income the ability to draw on part of the equity in their home; enabling them to live more comfortably.