5 Ways To Save Money On Your Home Loan

One of the most common New Year’s resolutions people create is to try and save money. One of the easiest ways to save money is to take a look at your home loan and find some creative ways to cut down on your repayments. Fortunately, there are a number of different things you can do with your home loan to reduce your ongoing monthly repayments.

Get a Better Interest Rate
If you stick with the same lender for a long period of time, it’s very likely that you’re not getting the best rate you could be. By refinancing, you’re able to seek out a lower interest rate and that alone has the potential to save you money every month. Typically, you should be reviewing your home loan products regularly with the help of your mortgage broker and always looking for the best deal to suit your needs.

Use an Offset Account
If your home loan product doesn’t come with an offset account, you’re likely missing out on some good opportunities to save money. An offset account is a lot like a transaction account, however, it has the added benefit of saving you interest on any funds that are sitting in the account; as it works in conjunction with your home loan account. Given the financial environment that has seen savings accounts attracting incredibly low rates of interest, it’s well worth considering placing any spare funds in an offset account.

Make More Payments
A simple change like making fortnightly repayments over monthly has a huge impact on how much money you’re putting into your home loan over a long period. Instead of making 12 payments, you end up making 26 smaller payments, with the net amount paid being higher. This means that you’re paying down your mortgage faster and reducing your interest charges in the process.

Add Additional Funds
If you have the opportunity to pay down your mortgage with a large lump sum payment, this has the additional impact of saving you money on interest. These types of funds might come your way thanks to a bonus at work, a gift, an inheritance or even from the sale of an asset such as a car. The faster you can reduce your mortgage balance, the lower your interest payments will be.

Consolidate Debts
If you have a home loan and you also have high-interest debt such as a car loan, credit card debt or personal loans it might be worth looking at rolling all those debts into your home loan. By doing that, you’ll reduce your ongoing weekly interest costs which is money that you can use to pay those debts faster.