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Pay off your mortgage faster and save Pt 1

21.06.22 | Marc Barlow | Blog

It’s looking extremely likely that interest rates on loans of all descriptions will be going up over the next months and years. The era of ‘cheap money’ has passed us by, and we’re now back to a period of ‘normalisation’ in money markets.

While this rise in rates will impact loans of all types (credit card debt, personal loans, etc.) its biggest impact is on home loan borrowers.

Now is the time to focus on paying off your debts as quickly as possible. It’s more than an even bet that your loan repayments will be higher this time next year, and probably even the year after that. So the more you can pay right now and over the next 6 – 12 months, the more you’ll save over the life of the loan.


Consolidate debts


Before getting into home loans, let’s quickly look at other debts. While your home loan is bigger, it’s likely to be the cheapest debt you have. Interest rates on other debts and lines of credit are often staggeringly higher. Get rid of all other debt. Pay off your credit card(s), don’t get payday loans, stop selling your stuff at Cash Converters! If you want to buy a property and pay your mortgage with a minimum of stress, get your finances in order first.

If personal debt is a problem, there are organisations and charities that can help you consolidate your debts and pay them off faster. Watch out for scammers! Look for government sites and known charity groups.

Some reputable places to start:


Pay faster, pay less


For most people, a mortgage is the biggest debt they’ll ever have in their life. And the vast majority of people manage to pay off their 25 or 30-year loans successfully. Generally, the lower the loan, the lower the repayments, so there’s good reason to pay fast and early.

Taking few years off your loan period by paying more than the required amount can save you thousands and thousands of dollars in interest and fees.

With wages still not keeping up with inflation, it’s hard to make extra payments. But we will have a few suggestions for you next week. Every little bit helps!

Stay tuned for Part 2 and please contact us if we can help in any way.