How to spot great Mortgage Terms & Conditions 

Interest rates are at an all-time low, so now is a great opportunity to set yourself up for financial freedom through property investment, not only for today but for your retirement years! So this is the perfect time to ask yourself are my mortgage terms & conditions  the best they can be?

There are a few proven strategies you can use to pay less interest on your home loan and pay it off sooner. 

Strategy 1:  Find The Cheapest Home Loan You Can – But Be Sure To Take Into Account Both – Rates & Fees

It would be so much easier to decide which home loan you should use if you could easily compare interest rates and fees. But it is difficult! There are all sorts of deals available for all sorts of loans, and it’s a big job wading through all the documentation to find out the real interest rate and to uncover all of the fees.

While one loan may have a cheaper interest rate, it may have higher monthly fees. Another may have exit penalties. Another lender might tempt you with a cheap short-term rate, but then charges high rates of interest and high fees after that period elapses.

The best way is to have an expert do it for you. The right loan broker spends every day comparing home loans, and using their knowledge, computer modelling and loan comparison expertise to find the cheaper loans will work.

 

Strategy 2: Making Extra Repayments (Even Small Ones) Can Make A Big Difference

Paying extra off your home loan – either on a regular basis or with the help of a one-off financial windfall – can save you a small fortune in interest repayments over the long term with your mortgage.

 

1. Use Surplus Income

 Can you afford to pay a little extra off your home loan each month? Even reasonably small amounts can make a big difference because the extra you pay comes straight off the principal. This will result in ongoing interest savings. 

 

2. Take Advantage of Falls In Interest Rates

If interest rates and your required monthly repayments fall, try to maintain the old monthly repayment as a way of making extra repayments. 

 

3. Pay Fortnightly Rather Than Monthly

This is a useful little strategy that works because you effectively pay an extra month’s repayment each year. You simply divide your monthly repayment in two, and pay that amount every fortnight. Because there are 26 fortnights in a year, but only 12 months, you end up paying extra off your home loan each year, making your mortgage terms and conditions one step for the better.

The key to saving the most money is to ensure you use the combination of strategies which best suit you, your family and your budget.

 

Did you know we offer Home Loan Health Checks that are free with no obligation?

Did you know that we have our internal loan brokerage team member that can always assist?


 

 If you would like to know more or need assistance, feel free to reach out to Lucy Ramunno.

To get in touch, just email lucyr@financiallysorted.com.au

For more articles about gaining and maintaining a mortgage and other financial advice

 

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