Your home loan will possibly be the biggest investment you will make in your life and a debt that you would like to pay off as soon as possible. Here are our tips on how to pay off your home loan faster.
1. Pay it off quickly
There are all sorts of strategies for paying less interest on your loan but it usually comes down to one idea: Pay it off as soon as possible.
For example, if you take out a loan of $400,000 at 5.00 per cent for 25 years, your repayment will be about $2,338. This equates to a total repayment of $701,508 over the term of your loan.
If you pay the loan out over 10 years rather than 25, your monthly payment will be $4,242 a month.
2. Find a lender with a lower rate
Switching your current loan and getting another loan at a lower rate can be a big difference of thousands of dollars and time. You may find that you can get a better rate that is much cheaper than your current loan.
But be careful, there may be exit fees on your old loan and establishment fees on your new loan.
3. Choose a loan that suits you
Rank a list of potential home loans and give them a score.
Different loans may suit different needs so try your best to find one that matches everything you need.
You may find that this will save you a lot of money.
4. Look for deals
You may find that while constantly looking for home loans, that you may be given a deal. Just make sure to check what it will cost you to change loans.
If you end up switching loans, keeping paying the amount you were paying originally to keep the payments down.
5. Try to avoid constant spending
Try and avoid buying all the unnecessary purchases like the daily coffees and lunches.
We’re not saying that you should live like a homeless person but cutting down on your expenses can make a huge difference.