Getting mortgage-free faster
Really, there’s no magic formula to getting mortgage-free faster. It essentially boils down to: “Pay as much as you can, as often as you can.” But there are a few different ways to do that, and a couple of extra hints as well.
Read more about refinancing
Make extra payments whenever you can – right from the start
When you first get a home loan it can feel overwhelming – what is $500 when you owe $550,000? But putting any extra money into your mortgage right from when you first get it helps those extra payments become a habit. Over time your small payments build up, as well as saving you on interest.
Pay fees upfront
Rather than putting lending fees onto your mortgage, if you can, pay them upfront. You’ll save on interest in the long run.
Don’t lower repayments if interest rates fall
If your interest rates go down, it can be tempting to pay less on your loan and have a little more spending money. If you can resist the urge, you’ll get rid of your mortgage that bit quicker.
Look at offset accounts
They’re not particularly popular here in NZ, so many people don’t know about offset mortgages. An offset mortgage is one where your mortgage balance is offset by your savings – so if you owe $100,000 but you’ve saved $20,000 in an offset account, you’ll only pay interest on $80,000. You can even fix it so your salary goes directly into the offset account, which reduces your interest day-to-day.
It needs to be worth it though – you may find there are extra fees or higher interest rates which wipe out any advantage of the account.
Three R’s – Review, Refix, and Refinance
Review your mortgage regularly, and see if you can get a better deal with your own lender or with another lender. This is where we can help you – we’ve got the experience in talking with lenders to get you a better deal.