A large number of Australian home owners intend to repay their mortgage off sooner than specified in the terms of their mortgage contract. This information comes from a recent survey conducted by the Mortgage Industry Association of Australia (MIAA).
What is even more surprising is that the majority of persons interviewed are confident in their ability to repay their mortgage sooner.
According to the CEO of MIAA, Mr Phil Naylor, Australian home owners are becoming more confident in taking control of their finances despite general concerns such as rising interest rates and job security.
Most respondents had said that they would pay off their mortgage sooner by making higher regular repayments as well as additional lump sum payments.
To anyone paying a mortgage, the idea of owning your home free of debt sooner is naturally very attractive.
So how can you really pay off your mortgage faster?
Should you refinance? Will extra features, such as a redraw facility, mortgage offset account or a line of credit help you? Or should you go for a basic 'no frills' loan instead, and make additional payments whenever you can?
Here are some tips for reducing your mortgage:
- Shop around for the best possible interest rate, because that's your single biggest cost. It’s the underlying rate that counts not the 'honeymoon rates'.
- If you’re thinking of refinancing, make sure you’ll be better off first. If it sounds too good - it probably is.
- If you want additional features, look for a low interest rate loan that has them. Paying an extra 0.5% per cent interest for a loan with features that will save you money, will probably end up costing you more than you'll save.
- Make extra regular payments if you can. They'll make the most difference in the first few years of the loan, but can be a good idea at any time.
If you enjoyed this article and would like to learn more about paying off your mortgage sooner please go to http://www.honeyloans.com.au where you will find a wealth of information on the Australian Home Loan market.
Maya Pavlovski holds a Bachelor of Commerce Degree from Melbourne University and is a qualified CPA.
