Revealed: Top 5 Ways Brokers Repay their Mortgages Faster.
- By andrewson Samuels
- Published 10/1/2009
- Business
- Unrated
Who wouldn’t want to repay their mortgage fast and reduce the amount of interest paid over all? There are strategies that home owners can employ to pay down their home loan quickly and maximise their money.
Making payments more often
One of the easiest and effective ways to reduce the mortgage loan quicker is to make more frequent payments. If you pay your home loan more frequently than once a month, instead of 12 annual payments, you may make 13 repayments each year, and this can save some people up to eight years of the loan term. Many loan structures allow you to pay weekly or fortnightly. As interest is calculated daily, you save interest by paying this way because you are reducing the loan balance more frequently.
Making higher repayments
A good way to get ahead of your mortgage commitments is to pay it off as if you have a higher rate of interest. Get a loan at the lowest interest rate you can and add 2 or 3 points to your repayment amount. So if you have a loan at about 6 percent and pay it off at 8 per cent, you won't even notice if rates go up. Best of all, you'll be paying off your loan quicker and saving yourself a packet.
Secure a lower interest rate
It’s
not all about the interest rate, but the rate that you pay does affect your home loan and a difference of just 0.5 per cent amounts to more than $100 per month on a $250,000 mortgage. By applying a lower rate to your Melbourne mortgage, you can save a substantial amount, and pay off the principal quicker by paying less in interest. A mortgage broker might be a good person to talk to, as they can usually negotiate a better deal on your behalf.
Consider all lenders carefully
Not all lenders are created equally, the difference in fees and interest rates differ across the board, not to mention the level of service offered. Non-banks lenders have some great Melbourne home loan products, some which have lower rate than the big banks, but some customers still prefer the security of a big bank with a recognised name.
Go without fancy features
All those extra features such as redraw, extra repayments and flexible loan structure come at a price. By switching to a basic home loan you can reduce your interest rates by around 1 per cent. Of course, if you really want these features it if better to keep them so as not to get charged to make extra repayments, but you may be able to negotiate a slightly more basic set up.
Making payments more often
One of the easiest and effective ways to reduce the mortgage loan quicker is to make more frequent payments. If you pay your home loan more frequently than once a month, instead of 12 annual payments, you may make 13 repayments each year, and this can save some people up to eight years of the loan term. Many loan structures allow you to pay weekly or fortnightly. As interest is calculated daily, you save interest by paying this way because you are reducing the loan balance more frequently.
Making higher repayments
A good way to get ahead of your mortgage commitments is to pay it off as if you have a higher rate of interest. Get a loan at the lowest interest rate you can and add 2 or 3 points to your repayment amount. So if you have a loan at about 6 percent and pay it off at 8 per cent, you won't even notice if rates go up. Best of all, you'll be paying off your loan quicker and saving yourself a packet.
Secure a lower interest rate
It’s
Consider all lenders carefully
Not all lenders are created equally, the difference in fees and interest rates differ across the board, not to mention the level of service offered. Non-banks lenders have some great Melbourne home loan products, some which have lower rate than the big banks, but some customers still prefer the security of a big bank with a recognised name.
Go without fancy features
All those extra features such as redraw, extra repayments and flexible loan structure come at a price. By switching to a basic home loan you can reduce your interest rates by around 1 per cent. Of course, if you really want these features it if better to keep them so as not to get charged to make extra repayments, but you may be able to negotiate a slightly more basic set up.