Signing your name on a 30 year home loan can be extremely daunting. Concerns about repayments, job security and unavoidable life circumstances can plague you during this time. But while it can be scary there are a few steps you can take to ease your mind and save you valuable money.
By using online tools, such as budget planners and mortgage payment calculators, you can work out how much you can comfortably afford to borrow. For instance, the government’s MoneySmart website has an easy-to-use budgeting tool that is comprehensive – including all of life’s expenses from electricity bills to entertainment costs!
A home loan repayment calculator is another useful tool for borrowers. Our repayment calculator helps you to estimate home loan repayments. You can also calculate interest you might save and the time you shave off your loan by making additional repayments.
Chop thousands off your home loan
When you’re allocating about one third of your household income – sometimes even more than one third of your income – to repay your home loan, increasing repayments may not be high on the list of priorities. But if you can afford to pay a little extra each month you could be far better off over the life of the loan.
For instance, if you borrow $400,000 and plan to repay the loan over 25 years at a rate of around 7.30 percent interest, adding just $100 per month – or just over $3 per day – could save you as much as $48,600 over the life of the loan. Add an extra $150 each month to the minimum repayment and you could be mortgage-free 3 years sooner! To determine how much you could save by increasing home loan repayments, try using our home loan repayments calculator today!
More ways to save
One of the simplest ways to find big dollar savings on your home is to compare home loan options and switch to a lower interest rate than you’re currently paying. For instance, if you switch from a rate of 7.30 percent to a loan at just 6.14 percent you could cut your home loan repayments by around $290 per month. That’s a saving of almost $3500 per year!
Budget for your home loan by comparing home loans online and working out your repayments with the RateCity home loan repayment calculator.