Owning your home sooner doesn’t have to be the stuff of dreams. There are several strategies that could help you pay off your home loan sooner. And it doesn’t necessarily mean sacrificing the things you love doing today.
The first step towards paying off your home sooner is to understand your loan—how much you owe, how much you are paying and what other financial commitments you have. Once you know where you stand you can start getting smarter with your loan.
1. Consolidate your financial commitments
Over time, it’s easy to build up small loans here and there. Individually, they may not seem like a lot, but it could mean you’re paying higher interest rates and lots of extra fees, which could keep you in debt longer and really impact your lifestyle today. By bundling all your financial commitments into one loan, you can get a clearer picture of what you owe and potentially save money too.
2. Make fortnightly repayments
If you can afford it (and you’re not doing it already), consider changing your home loan repayments from monthly to fortnightly. It can make a big difference to your loan.
Of course, by changing your repayment frequency you may need to be more mindful when it comes to managing your money. One way of doing this is to align your pay dates and repayment cycle. Even though it may take time to adjust, you could keep thousands of dollars in your pocket that you would have otherwise paid in interest, and save years off your mortgage.
3. Use an offset account
An offset account is a simple tool that can potentially help you save thousands over the lifetime of your home loan.
How does an offset account work?
An offset account is essentially a savings account linked to your home loan account. The account’s balance is ‘offset’ against your loan balance, so you’re only charged interest on the difference between the loan balance and the amount offset. Some lenders allow one offset account per home loan, and others offer multiple. If you do not currently have an offset account (or would like a mortgage that allows for several offset accounts), get in touch and we can help.
Own your home sooner and still enjoy the things you love
If owning your home sooner and maintaining your lifestyle are both important priorities to you, consider speaking to us.
Based on your goals, and personal situation, we will be able to create a personalised plan that’s right for you. With expert advice, you’ll be on track to owning your home sooner while still enjoying the things you love today.