It’s amazing how even small extra payments can produce super-sized savings on your home loan.
There’s an easy way to save thousands of dollars on your mortgage – and become mortgage free years ahead of schedule.
The answer lies in paying a bit extra off your loan each month.
Sure, the New Year can be a tight time financially. But the beauty of making extra repayments is that even small additional sums can have a big impact over time.
That’s because every extra dollar you pay off your loan is immediately deducted from the loan principal. This reduces the interest charge for the following month. However because your regular repayment remains the same, more of that payment also goes towards paying off the loan balance instead of just covering the interest cost.
It really is a proven – and very simple, way to turn the home loan tables in your favour and pay off your loan sooner. Along with savings of time, you could slash tens of thousands of dollars off your home loan interest cost. That’s money going to your pocket – not your lender’s.
A dollar will do
Okay, there may not be much spare cash in your budget early in the New Year. That’s not a problem – even the humble dollar can make a noteworthy difference to the time taken to pay off your mortgage. Adding just a single dollar each day to your home loan means an additional repayment of $7 per week, or $30 each month. Over time it makes a valuable impact on your loan.
Better still, there are pain-free ways to cut back to find extra savings. Cut out the daily takeaway cappuccino on your way to work – there’s at least three dollars a day that could go towards your home loan. Make Friday night takeout a fortnightly habit instead of a weekly one. You could save $10 0r $20 each fortnight this way, freeing up extra money to come off your home loan.
Small steps can make a significant difference to your loan balance, and the sooner you start, the bigger the long term savings.
See how much you could save
To discover exactly how much you could save by paying a bit more off your loan, take a look at the Extra Repayments calculator on the Aussie website (www.aussie.com.au) or speak with your local Aussie broker. It’s a great way to put your spare change to work, and best of all it’s never too late to start.
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