RateCity has identified three types of savers that have a variable home loan. They are:
- the prudent saver
- the feeble saver
- the partial saver
A type of person who added half their money saved to their variable home loan repayments when interest rates fell and the other half they spent is what RateCity terms the partial saver. This is a good strategy to have as the partial saver is paying off their home loan at a faster rate than making only minimum repayments and saving money in interest, but when interest rates rise above the level they are paying, they will be impacted by the higher rate and will need to pay more off their loan.
The amount of money the partial saver added to their loan will most likely not make a big impact on reducing the loan size for a significant time. The more you add to your home loan repayments the more you will save.
Use Australia’s leading home loan comparison service, RateCity.com.au, to compare variable rates. Also try our free Australian home loan calculator to see how much you will need to repay for different loan and term amounts.