Perth Voice Interactive

Mortgage Choice offers tips for paying off your mortgage faster

For many Australians, the Easter long weekend provides the opportunity to have some much needed down time. With interest rates sitting so low, the Easter long weekend also opens up the perfect opportunity for borrowers to spend some time thinking about whether their home loan is working as best as it can for them and their needs.

“With interest rates at historical lows, any extra money a borrower can contribute to their monthly mortgage repayments makes an even bigger difference than if the same amount of money was paid off on a mortgage with a higher interest rate,” local Mortgage Choice franchise owner Ruth Hatherley said.

According to the 2016 Money survey, 23.4% of respondents are not only up-to-date with their mortgage repayments, but they have the equivalent of at least 12 months’ wages sitting in their offset account or paid off their loan. By comparison, in 2015, only 13% of respondents said they were in the same financial position.

“Contrary to popular belief, it is becoming more and more apparent that Australian home owners are feeling pretty confident about their finances and are making financial decisions that reflect this confidence. With the property market still recovering in WA and with people being able to put away extra cash into their home loans now, it is setting people up to really start considering their next move, whether it be upgrading to their next home or buying an investment property,” she said.

For those wishing to pay off their mortgage sooner rather than later, there are a few easy techniques borrowers can implement, including:

• Refinance your mortgage: 

With interest rates sitting at historical lows and Australia’s lenders competing aggressively for business through sharp home loan pricing, you may find there is another product on the market that is not only better suited to your needs, but one that boasts a much lower interest rate, saving you thousands of dollars in interest over the life of your loan.

• Continue to make higher repayments:

Since the beginning of 2015, most lenders have shaved at least 25 basis points or more from some of their home loan products. As such, many borrowers would find that their mortgage repayments have dropped. But, instead of lowering your monthly mortgage repayments, it is a good idea for borrowers to continue paying off their mortgage as though rates have not dropped. By continuing to make higher mortgage repayments, borrowers will find they are able to pay off their mortgage faster.

• Make the most of an offset account:

Those borrowers who make the most of their offset account and use it as effectively as possible, are able to significantly reduce the amount of interest they have to pay on their home loan. So, if you have recently received a pay rise or are expecting to receive a good amount of tax back at the end of the financial year, make sure you feed it all into your offset account as this will help you to offset the amount of interest payable on your home loan.

Mortgage Choice 
Suite 1, Level 1, Shafto Lane | 876 Hay Street Perth
(08) 9485 0090
http://www.mortgagechoice.com.au/perth1