How To Pay Off Your Loan Sooner?
An offset account is a transaction account that’s linked to your home loan account. It can provide you with more flexibility and potential savings as it means that instead of being charged interest on the full loan balance, interest is charged on the loan balance minus the amount that’s in your offset account.
A mortgage with a redraw facility is specifically designed to allow you to make additional repayments and redraw them at another time if you need to. This gives the benefit of allowing you to make extra payments and reduce the amount of interest you pay overall, while giving you the freedom to withdraw the money back out of your mortgage should it be necessary.
Many people pay off their home loans on a monthly basis because they get paid monthly. However, it is possible with some loans to make mortgage repayments on a fortnightly or weekly basis, and this could cost you less over the term of your home loan. When you make your repayments fortnightly, you end up paying an additional month per year due to there being 26 fortnights annually, not 24. Essentially, this means that you might not only save money in the long run, but you might also reduce the time you pay off your mortgage.
If you have a variable rate mortgage loan, you may be eligible to make extra repayments on your loan. Sometimes, lenders will cap this at a certain amount, however, the more money you’re able to pay into your loan, the quicker you’ll be able to pay it off.
Our repayment’s calculator can help you figure out how much extra repayments you can make, and what it will save you.
Although we have outlined some basic debt reduction strategies above, it’s best to speak with an Inovayt mortgage broker to develop a personalised strategy to suit your circumstances.