Paying off a home loan as fast as possible is usually the most desirable option for most Australians. After all, the sooner you become debt-free, the sooner you'll be able to get your finances back on track and begin working towards your next big investment.
There are a wide range of different options and facilities available to home loan borrowers that can be used to make the burden of repayments a little more manageable in the long run, and can even help to reduce your mortgage length if used correctly.
For example, one of the major components of making home loan repayments is the interest involved. Depending on the economic conditions of Australia at the time you took out your mortgage, as well as the type of home loan you chose, your interest rate will have an influence over the size of your repayment amounts.
However, it could be worth discussing the option of adding an offset account to your home loan, which can help to dramatically lower your overall repayment scheme. Funds you have in your account are offset against your loan balance. As a result, this reduces the amount of interest you pay overall.
If you had a home loan with an overall balance of $500,000 and an offset account attached with a balance of $50,000, you would only be charged interest on $450,000 rather than your full home loan amount.
This has very clear benefits from the beginning and could be a fantastic option to consider for those with a high level of income or established savings.
You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we’ll call you!