Home loan types, the prudent saver



article header

RateCity has identified three types of savers that have a variable home loan. They are:

  • the prudent saver
  • the feeble saver
  • the partial saver

The first we talk about is a prudent saver who makes the same higher repayments after interest rates drop. It is a wise strategy to be a prudent saver because when interest rates rise again the prudent saver will not be impacted by the higher repayments. This is because the prudent saver is already paying an even higher rate each month.

Also, by the time interest rates are on the rise once again, the prudent saver would have reduced their loan debt therefore making their repayments drop. If you take up the prudent saver strategy you can potentially save tens of thousands of dolalrs off your home loan and reduce the loan size by years, depending on the extra amount you add each month.

See also more information on the feeble saver and the partial saver.

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.

Advertisement

^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

Compare your product with the big 4 banks, or add more products to compare
As seen on