Taking on a home loan may seem like a massive long-term financial commitment, which it can be. But by following a few simple tips you could ease the burden and save yourself tens of thousands of dollars in the process.
Firstly try using online tools, such as budget planners and mortgage calculators, to work out how much you can comfortably afford to borrow. The government’s Money Smart website offers a great budgeting tool that covers every aspect of life’s expenses – even entertainment costs!
Mortgage calculators are another useful tool for borrowers. Our mortgage calculator helps you estimate your mortgage repayments. You can also calculate interest you might save and the time you shave off your loan by making additional repayments.
Save tens of thousands
It’s easy to fall into the trap of making just the minimum monthly repayments on your home loan. However, if you can afford to pay a little extra each month you could be far better off over the life of the loan.
If you’ve got a $400,000 home loan that you’re repaying over 25 years at a rate of around 7.30 percent interest, adding just $100 per month could save you a whopping $48,600 over the loan term. Add $150 extra each month and you could potentially be mortgage-free 3 years sooner. To work out how much you could save by accelerating repayments, mortgage calculators can be a very handy tool, so why not have a go today?
How else can you save?
One of the simplest ways to find big dollar savings on your home is compare home loan options and switch to 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!