New research from financial comparison site RateCity.com.au has revealed if you give up one coffee a day and put the money into your mortgage you could be $71,891 better off over the lifetime of the loan.
The results show how much bank customers can save by rolling small amounts into their home loan regularly.
RateCity spokesperson Sally Tindall said most people have no idea how much of an impact extra repayments can have on your mortgage.
“We wanted to show that if you squirrel away a small amount each week, it can knock years off your loan. It’s also something most of us can easily do with very little effort.
“Buying an extra cup of coffee or a bottle of water is often just mindless spending. If you save that money you’ll be shocked by the results.
On a $300K mortgage over 30 years with an average rate of 4.31 per cent.
- Swap drinking $3 bottled water everyday for tap water instead and save $62,266.
- Give up one $20 bottle of wine and roll the money in your mortgage and save $59,482.
- Take public transport once a week instead of getting an Uber and save $48,185.
- Ditch breakfast out once a week and save $59,482.
- Cut out a six pack of beer and roll the money in your mortgage and save $59,482.
“By making additional mortgage repayments you effectively shorten your loan term – that means you are taking the razor to your interest bill.
“If you can save as little as $20 every week and roll that money into your home loan you could be ahead by $59,482 over 30 years.
“Work out how much you can save each week and set up an automatic bank transfer. Then forget about it. The real reward comes with time.
“Paying off a mortgage can seem like climbing a mountain, but there are always simple things you can do to help get ahead,” she said.