Making home loan repayments comfortably each month is a great achievement for any home owner.
It shows financial discipline and slowly but surely builds equity in a significant asset – just reward for all that hard work!
But what if you want to do more than the minimum, what if you want to get ahead and pay the whole thing off faster?
Well there are several ways you can do this, and you may well be able to find one that suits your circumstances.
Any discussion of interest in home loans could easily become very complicated, and we have no intention of getting bogged down in decimal points and equations.
All you really need to know is that the more you pay in your home loan repayments – and the more frequently you make them – the less interest you'll pay overall on your loan.
From there it is a very simple calculation: less interest paid means you'll be mortgage-free quicker!
Can we afford to pay back more?
The first thing to ask is can we afford to pay back more than we currently do?
Just because you are able to doesn't necessarily mean that you should – or that you want to.
However even a small amount extra can make a big difference over the full term of a home loan, so it is worth having a look at your books!
Perhaps a bit of budgetary discipline can help you free up some funds to divert to your home loan.
Examine your options
There are many options available to you if you wish to get ahead of the curve in paying back your home loan.
You could increase your current repayment amount, move to a schedule of more frequent payments, or become more proactive in making lump sum repayments when extra money becomes available to you.
Another option is to investigate setting up an offset account and redraw facility.
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!
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.