When should I make my loan repayments?

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.

We have many calculators available including an extra repayments calculator. Take a look for yourself and have a play around with some options that suit your financial situation.

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!

You might also like...

Finance Brokers Tasmania selling a house Hobart

Preparing for Interest Rate Hikes!

When you consider a ‘hike’, what is the first thing that springs to mind? A walk through the bush or a sharp rise? The RBA lifted the official cash rate by 25 points to .35 percent last week – the first rise in 11 years. While we understand that a rate rise is never a good thing, interest rates are still at historic lows and we wonder if the use of the word ‘hike’ is a necessary one!

Finance Brokers Tasmania Lance Cure Gary Casboult

What is a SMSF?

Self-managed super funds (SMSF) are a different way of saving for retirement. A SMSF gives flexibility and control over where your retirement funds are invested, including the opportunity to invest in residential and commercial property.

Finance Brokers Tasmania - fixed interest rates

Government Grants - A budget Update 2022/23

If you missed the 2022-23 budget announcements this week, you may have missed the incentives announced for home buyers. While most are not new, the government have increased the number of spaces available for eligible home buyers through their Home Guarantee Scheme.

FBT Hobart Bec and Dini

Do you need pre-approval?

We are often asked if you need pre-approval before looking for your dream home. Pre-approval is not essential but it is one way to ensure you don't miss out!