Tips to save interest
Try these simple tips:
- Rather than spending any large lump sums you receive, pay them straight into your loan. Think of windfalls like your tax refund, an inheritance, your annual bonus, an insurance payout or an unexpected cash gift.
- If your budget allows, make more than the minimum mortgage repayment your lender requires. The extra $10 or $20 may not seem like much at the time but the magic of compounding interest means that these small extra repayments will make a difference to the term of your loan and how much interest you pay.
- Follow a fortnightly or weekly repayment schedule rather than monthly. You will end up putting more money towards your mortgage over the course of a year than if you make payments monthly.
- Use an offset account