Get Rid of Debt – 10 Ways to Pay Down Your Home Loan Mortgage Sooner

Get Rid of Debt – 10 Ways to Pay Down Your Home Loan Mortgage Sooner

Below are the top 10 ways to pay down your home loan mortgage sooner:

1. Make Additional Repayments To Your Loan

It is amazing how much an additional $10, $20 or $50 per week can make to your home loan over the long term. If you are determined to cut down your spending, and start to watch your money more carefully, this can be quite easy to unprotected to. Having a budget can help you find this additional money. It is amazing how a small amount of money can make a large difference to your long term financial future.

2. Make More Regular Repayments To Your Loan

The interest cost on your home loan is more than likely calculated daily, so if you can make more regular repayments you can pay more off the loan sooner and reduce your interest costs.

The easiest way to do this is set up your loan repayments to match when you receive your wages / income. I.e. if you get paid on a fortnightly basis you may wish to pay the fortnightly portion in that pay instead of waiting to pay it on the day of the month, when your repayments fall due.

3. Look At Other Loan Options

There may be cheaper interest rates or lower fee loans on the market that you may be considering. This method that if you can get a cheaper interest rate and continue to pay the same amount in repayments that you are currently paying, you will pay more off the principal part of the loan, clear the loan sooner and save yourself interest.

If considering changing financial institutions to get a better loan deal, be careful. analyze this option carefully as there may be refinancing costs involved.

Speak to your own bank about your loans including your fees and interest costs. You never know, you may be able to get a better deal by your existing financial institution if you ask.

4. Save Via A 100% Offset Savings Account

Consider putting savings in an offset account attached to your loan. If you have any money sitting around in different accounts consider consolidating them and putting all proceeds into a 100% offset savings account.

The interest charged on your home loan is calculated on the difference between the home loan balance less the balance in your savings account. This works the same way as if you had paid the money directly into your home loan but instead the money is kept obtainable to you in your savings account.

5. Pay Any Spare Income Into Your Home Loan

Use monies such as your tax refund or bonus payments to excursion down your loan. If these monies haven’t been allocated in other places, you can make a large dint in your home loan by paying off lump sums. You may like to set aside some of your bonus to reward yourself for a job well done, but try to allocate a portion of these amounts to your home loan to excursion this debt down. You can always reward yourself later when you are living in your home debt free (some food for thought!).

6. Hit The Principal Early

When you initially get your home loan, you may be in a good position to excursion down the debt before you get married, have children or go overseas etc.

At the beginning of a home loan you will generally be paying a higher proportion in interest costs as the debt will be higher. As you pay down the loan, more of your repayments are reducing the principal amount. consequently if you can pay more into the loan initially, reducing the principal amount, you can reduce your home loan sooner.

7. Pay Your First Home Loan Payment As Soon As You Settle

Why not get ahead on your loan as soon as you start off. A good trick is making a payment on the day the loan settles. This way you are always one payment ahead and are saving a bit of interest from day one.

8. Don’t Lower Your Repayment

If your minimum home loan repayment drops because of a fall in interest rates, don’t lower your repayments. By continuing to pay your normal repayments you will be able to reduce the balance of your loan a lot sooner.

9. Check Your Loan Statements

It is up to you to check your loan statements frequently to ensure the fees and charges you are incurring are correct. Check for in discrepancies with:

  • Interest rates
  • Monthly service fees
  • Yearly service fees
  • Loan formation costs
  • Repayment amounts

10. Ask About specialized Packages or Special Deals On Your Home Loan

Some edges will offer packages for certain occupations or those people with lending over certain levels. These packages can be quite effective with offering cheaper interest rates, reduced fees or other benefits. Always ask your bank to see what they can do for you.

I hope this has given you some motivation to get a few additional dollars into your home loan mortgage so that you can pay off your home loan sooner.

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