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Sunday, April 05, 2015

mortgage calculators- Pay fortnightly

Venessa Paech by Venessa Paech 11 Nov 2014  Budgeting, Home loans, How To, Mortgage Who doesn’t want to pay off their home loan as quickly as possible? But it often feels like an uphill battle, with you eating away at what you owe oh-so-slowly over the long haul. But it’s not just about peace of mind. The faster you pay your loan off, the less money you’ll be paying. So if you can afford to increase the amount, and frequency of your payments, you could potentially save hundreds of thousands of dollars in interest. While you should always check with professionals to be sure you’re getting the right advice for your situation, these basic steps can offer a solid starting point for beating down that debt if you’re not doing them already. Use mortgage calculators You won’t be able to make progress unless you know precisely what you owe, and how much you can afford to adjust what you’re paying. Give our repayments calculator a whirl to start you off – plug in how much more you think you can pay, and see what happens. beaumaris-home-october-2014-158 Pay fortnightly Halving your monthly repayment and paying every fortnight lets you pay 26 rather than 12 repayments a year. That may sound like the same thing, but in fact you’ve added the equivalent of one extra monthly ­repayment every year on a principal and interest of your loan. That can add up to big numbers over the life of your loan. Not all mortgage providers will let you make fortnightly repayments, so check first (ideally before you take out your loan). Utilise lump sums & windfalls If you get a large tax return, bonus, inheritance or investment dividends, consider adding these to your mortgage account. With many home loan products, these can help reduce the amount of interest you’re paying significantly, cutting years off your repayment schedule overall. Remember there are tax implications for these, so check carefully about any additional costs you might be obligated to pay. caulfield-home-15 Explore discount entitlements Sometimes you can get discounts on your home loan if you’re a member of a certain occupation or professional organisation. Ask your lender if your profession entitles you to a different option and any additional savings. It never hurts to ask! Read more: Save for a deposit (without depriving yourself) Consider updating your bank accounts If your mortgage is your financial priority then it makes sense to make sure you are working it the best way possible to minimise interest. Talk to your bank manager to make sure you’re using your accounts the right way, sometimes a few tweaks can make a difference. Review & compare regularly Your needs change, your income changes, as do home loan products and interest rates. Don’t leave your home loan paperwork to gather dust and slip into a routine of automatic debits that you forget about. Stay on top of what you’re paying and how you’re tracking. Work with your mortgage provider to develop a system for regular health checks on your loan, asking if there are better interest rates, better deals, different products that better suit where you’re now versus when you took out the loan. Good deals are out there, but you usually have to do some homework to find them. Don’t forget that there can be penalties for switching home loans – you’ll need to weigh that against any savings. Read more: 7 first home buyer mistakes Get frugal The most obvious way to pay your place off faster is to cut back on other costs and invest that money into your loan fortnightly or monthly. If you can afford to take regular holidays (though you no doubt deserve them), think of how that money could be better spent invested in your loan. When you’re mortgage free, the holidays should be all the more enjoyable! Get it right before you start If you haven’t bought yet, the single best way to pay off your property (if that’s your goal) is to be able to afford it. Take care not to overcapitalise when you buy, as miscalculations or stubbornness about what you can afford is a sure fire way to end up in a vicious repayment circle. Read more budgeting tips from the experts The information in this article is of a general nature only and does not consider your personal objectives, financial situation or particular needs. Follow us on Twitter for more news, tips and inspiration. Become our chum on Facebook and explore our Pinterest boards. Like this article or found it helpful? Share it! Tags: Budgeting Home loans How To Mortgage Venessa Paech About Venessa Paech Venessa is the Senior Manager for Content & Community Strategy at realestate.com.au. She's worked in digital publishing for over a decade and has been a passionate online community builder even longer. She's the proud owner of a place to call her own and wants every Australian to have that same opportunity.

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