Repaying your mortgage can become stressful when it accounts for a significant proportion of your income. Here are a few tips on how to reduce your loan amount and pay back your loan sooner:
1. Make more frequent repayments
Making more frequent repayments can reduce your borrowing amount. For example, if you currently have a repayment amount of $2000 each month, you will end up paying $24000 by the end of the year, However, if you halve this amount and pay it fortnightly, your annual repayment amount would be $26000, reducing your loan amount and loan term as well. You can use your Extra Repayments Calculator to find out how much you can save with frequent repayments. Our How Long to Repay? Calculator can also provide a representation of how frequent repayments can shorten your loan term.
Refinancing from a bank to a non-bank lender can reduce your borrowing amount and loan term if your non-bank lender can offer a more competitive interest rate. Homestar Finance offers one of the lowest interest rates in the home loan market. Our Complete Loan Comparison Calculator can help you calculate the potential savings by refinancing your home loan today.
3. Using an offset account
An offset account is a savings account that is linked to your home loan. Any money deposited into this account can offset the principal amount you owe, reducing the overall interest charged. Homestar Finance offers an Offset Account for all its Variable Rate Home Loans. By entering your details in our Offset Mortgage Calculator, you can find out how much an offset account can reduce the interest and repayment amounts on your home loan.