If the idea of having mortgage debt for the majority of your life makes you feel uneasy, then here are five ways you can pay off your mortgage faster.
Work out how much you could save
Knowing how much you could save by making extra repayments can be a real motivator. Unfortunately most mortgage holders don’t realise that small repayments could shave tens of thousands of dollars in interest repayments off their mortgage. Don’t fall into the trap of meeting your minimum repayments if you can afford to pay a little more. Every extra dollar counts, and a good way to understand how much you could save would be to try an online repayments calculator. Liberty has an online “extra repayments” calculator, which you can use to work out how much you could save by making additional repayments.
Start paying down the principal from day one
If you want to shave years off your mortgage, then you should make a strong effort to pay down the principal from the start. Disciplined repayment habits are crucial to financial success, so consider cutting down on non-essential spending early, and knuckle down on making those extra repayments. This may mean forgoing things like yearly holidays, and perhaps giving up a few luxuries like online streaming services. The first few years of any mortgage are when you can make the biggest gains, so get onto it early.
Consider engaging a mortgage broker
Buying a house is one of the most important financial investments you’ll ever make, so it pays to ensure you get the right deal for your home loan based on your needs. Unfortunately, going directly to your bank doesn’t always guarantee this and there could be a better solution available from another lender. A mortgage broker will be able to help you find the right lender and interest rate, plus they will provide help and guidance as you navigate through the whole process.
Look outside the big four banks
When it comes to finding a loan that best suits your needs, don’t think the only option is to go with one of the big four banks. Whether you’re a seasoned investor or a first home buyer – there are a range of alternative options, such as non-bank lenders that might be able to provide more specialised options. In most cases using a broker will be valuable to accessing these lenders. If you’re time poor or just need some help, then call a Liberty lending specialist directly on 13 11 33 or visit here.
Get an offset account
An offset facility is a nominated savings or transactional account where the balance of the account is offset against your loan principal. The amount in the offset account helps reduce the principal on the loan, which means that when the lender calculates your monthly repayments, it reduces the amount of interest you pay. Offset facilities are not always available on every loan, so if this is a feature you’d like, then talk to a mortgage broker about which loans offer this feature.