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REDUCE YOUR MORTAGE LOAN & SAVE THOUSANDS!
JULY 19, 2017
Take years off your mortgage with one simple trick
If you are trying to organise your own home loan, through the bank that you have had an account with since you were a “dollar mite”, chances are they won’t tell you this.
Why? Because you could save thousands of $ in interest as well as reduce the term of your home loan …..And technically, they don’t want to lose you & what do they care if you are paying more interest than you really need to?
Sitting at work scrolling Insta during lunch trying to figure out how the hell “Kate” could afford to be on that yacht in Santorini. Thinking, what is she doing that I’m not? She has a mortgage, as do I…. Bills….me too…..? I mean, what gives?
With the world we live in at the moment it seems quite impossible, I mean how can we juggle mortgage repayments, travelling, enjoying a couple smashed avo’s a week and our gym membership?
By paying your home loan repayments every fortnight instead of every month could see you pay off your mortgage up to 4 ½ years faster and save up to $41,000 in interest repayments.
Yep, that’s right FORTY. ONE. THOUSAND. DOLLARS … give or take.
Why can you pay off your mortgage faster by paying fortnightly repayments? Glad you asked! Well for starters, you are making more regular repayments i.e. every two weeks instead of every month.
As the interest on your mortgage is calculated daily, paying fortnightly keeps the accrued interest down, yep down! So instead of paying the full repayment once a month simply split it into two payments.
Once you make the first payment into your new cycle, the next day interest is calculated on a smaller loan amount, therefore a lesser interest bill, meaning more of your repayment is going toward reducing the loan balance & less is going toward interest repayment. WIN WIN!
There are 26 fortnights in 12 months, so paying fortnightly is like paying 13 monthly payments in a year.
So you are paying a little bit more than the minimum payment.
I mean I don’t know about you guys but before learning of this nifty trick (which has already saved me a heap of interest ) I was putting a certain amount of money aside each pay day for ‘the mortgage”.
So once pay day came around again I would transfer the whole amount to the LOAN account. Now, as soon as I get paid I have half my mortgage repayment direct credited to my loan account.
So never make the repayment on your home loan monthly, make the repayment on your mortgage every two weeks. Also, pay as much as you can, as often as you can, but make sure your loan has fee free redraw first.
Check with your Better Choice Mortgage Broker to see if you are making fortnightly repayments to your mortgage and whether you have the fee free redraw option.
Fee free redraw will allow you to redraw any advance payments you have made, just in case you need the money back for an emergency or any other worthwhile purpose.
Speaking to a Broker can and will change your life.
1. They have access to hundreds of loans from 35 Lenders.
2. They work for you, not the Bank.
3. After sales service is a Brokers speciality . They manage your loan for its life span (that means negotiating new offers or refinancing your loan if a better rate comes out)
4. WE ARE FREE!!!!! If your loan gets approved the lender pays us, not you!
Call a local Perth Better Choice Broker on 1300 805 221 or email bdm@betterchoice.net.au and we will get back to you. Want to know more about Home loans? Click here
* All information herein is indicative, as at the date of transmission & subject to change at any time without notice. Your personal circumstances are unique & interest rates fluctuate. Therefore outcomes stemming from making your home loan repayments fortnightly may & will vary.
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