Mortgage debt is rising in Australia as property prices increase and more people borrow money above their budgets. The lack of supply for housing in Australia and the high demand for property is driving the increase in prices. Australians who want to buy property have little choice but to acquire a high mortgage debt.
It’s not all bad news, there are ways to manage your debt and make a dent in your home loan.
How can I reduce my home loan debt?
- Setting a budget and sticking to it. The more you borrow to purchase a property, the higher the costs of taxes, fees and repayments.
- Making higher repayments on your home loan, this will lower your debt and save you money in interest charges.
- Continue the same repayment amount during interest rates drops. Look at this as an opportunity to pay extra off your home loan.
- Windfalls, pay rises and tax returns are all great opportunities to contribute to your home loan debt and take some of the pressure off.
- Switch to a better interest rate.
- Reassess your financial situation and speak to your mortgage lender about refinancing.
While mortgages certainly add to the stress of everyday life, if you budget, research and stay on top of your repayments the rewards of paying of your home will be well worth it.