If you’re reading this then chances are you are an Australian and are family with the traditional Aussie dream – “to own your own home”. Whilst this is still a dream for most, the idea of a mortgage is a burden. Below are some simple tips to help you to pay off your mortgage faster.
Mortgage repayments can seem like a never ending cycle for those that fall into the traps of poor interest rates, disadvantageous schemes and poor money management. The good news is that some simple changes and a bit of research can help to lighten the load. Do your research and shop around for the best rate on a home loan. In this guide to how to pay off mortgage faster Australia, we look at some of the basics.
Not all providers offer the same rates and incentives and some loans will be more appealing than others. That is why it is important to not only shop around, but to let lenders know that you are shopping around, as they may add a little bonus to sweeten the deal. Compare interest rates, small print and other fees. Look at the non traditional lenders as well as the big names. Some offer a discount for certain professions. Also, don’t be afraid to make a switch and refinance a mortgage further down the line if it will help you out.
Make sure that your payments are bigger, but also more frequent.
It may sound simplistic to say that the more you pay and the more often you pay it, the quicker your debt is paid off. Yet, it is the simple truth. If you can commit to frequent repayments at an amount higher than normal, you could be mortgage-free much faster. This also means forgoing the “nice” honeymoon deals and getting straight into the cold, hard system of repayments. Honeymoon periods are nice at first but not always financially beneficial in the long run. This is easier said than done in some households, which is why it is important to manage your money well.
Set up an offset account for your salary and mortgage repayments and enjoy the benefits.
An offset account is a helpful transaction account that can reduce the interest that is paid on a home loan. These savings can all add up and reduce the repayment period significantly. It also helps to be able to pay your salary into that account as interest is calculated daily and rates can adjust for the better.
Make sure that repayments are the number one financial concern.
You may hate the idea that the main financial focus of the household is the mortgage, rather something more “fun”. But, the more effort you put into paying it off, the sooner that monkey is off your back and you can focus on things that are more fun. This means tightening the belt and making the money stretch a little further for that repayment period. Lump sums and bonuses, such as tax refunds and workplace bonus schemes, should go straight into the mortgage repayments to chip off large chunks at a time.
These tips on how to pay off mortgage faster Australia are just some of the basic principles for managing a mortgage and paying it off more quickly. With these 4 key areas in mind – a smart deal, regular and sizeable repayments, a well-managed offset account and smart money management – you should be able to take larger chunks out of your mortgage. Before long, the weight of the burden will ease.