5 Tips to Lower Your Mortgage

There are many ways in which you can try and lower your mortgage balance and / or your mortgage repayments. We’ve come up with what we consider to be the top 5 ways to save some money and pay off that mortgage sooner.

Have Your Mortgage Reviewed Regularly

Most people don’t know how their existing mortgage compares in the marketplace. In many cases, re-negotiating your loan with your existing lender can lower your interest rate considerably – and if not, then moving to another lender with a lower rate may be a great way to save hundreds or thousands of dollars in interest each year. Some lenders even offer cash back incentives for you to refinance to them so call your broker to see if there’s something better out there for you.

Use an Offset Account

If you find you save some of your income into a savings account, why not try an offset account instead? Essentially, putting money into an offset account is similar to putting extra money into the loan. Most lenders offer an offset facility on their variable loans and some let you have one on fixed loans – you can use the spare income you have to lower your interest repayments – speak to your broker about how an offset account can benefit you.

Consolidate Your Debt

Paying off the same amount in credit card debt and car loans as you do in your mortgage payment? Sometimes, rolling your personal debt into your home loan can greatly reduce the interest rate payable on the personal debt, so you can save money there; and if you continue to make the same repayments as before you’d close the loans out sooner. You could also build a handy redraw fund into your home loan this way – allowing you access to funds for something worthwhile at a later date.

Are Your Loans Structured Correctly?

For those of you with multiple properties and investment loans, structuring your loans correctly is vitally important in keeping your accountant happy. Loans that are structured incorrectly can see you lose money by not utilising investment tax concessions correctly. Carbon’s experienced finance brokers work in conjunction with our accountants to ensure your loans are set up in the correct way for maximum financial benefit.

Pay Weekly or Fortnightly

Some lenders offer you the ability to pay more often than monthly. Doing so can mean that you pay more into your loan each year than normal. By paying more, you are reducing the interest payable on the loan each year which can result in having your loan paid off years earlier. For example, if you pay fortnightly payments by halving the monthly payment, you are essentially making one full extra payment into your loan each year as there are 26 fortnights in the year which equals 13 months of normal payments rather than the usual 12. Why not ask your broker if this is an option for you?

If you need assistance with any of the above, contact Carbon Finance for a complimentary discussion. If you haven’t had your finances reviewed for some time, make the call today and see how much you could save.

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