TUFF TIPS: 3 Expert Tips to Pay Off Your Mortgage Faster
by Aaron Gerovich on Jun 29, 2023
Expert Advice from Kristen Pavez, Finance Broker
Paying off a mortgage can feel like a daunting task, but with the right strategies, you can accelerate the process and save a significant amount on interest payments.
We spoke to Kristen Pavez, an experienced finance broker from Diversifi, who shared three valuable tips to help you pay off your mortgage faster and achieve financial freedom.
By implementing these expert tips, you can potentially shorten your loan term and build equity in your home sooner.
Tip 1: Harness the Power of Offset Accounts
Offset accounts are a powerful tool that can help you pay off your mortgage quicker. By attaching at least one offset account to your home loan, you can effectively reduce the amount of interest you pay. Some banks even allow you to have up to 10 offset accounts, providing you with greater flexibility.
Using your offset account as your primary everyday account, have your income and savings deposited into it. The balance in your offset account is then offset against your loan balance, reducing the interest charged on your mortgage. Over time, this can lead to significant interest savings and a shorter loan term.
Tip 2: Stay Informed About Competitive Rates
To ensure you're getting the best deal on your mortgage, it's important to stay informed about competitive interest rates. Regularly review the rates applicable to your debt level and be proactive in negotiating with your bank. Every six months, contact your bank to inquire about their current rates and ask for a rate that matches or surpasses the competitive rates you've discovered.
Alternatively, enlist the assistance of a professional finance broker like Kristen!
A broker has access to multiple lenders and can help you find a competitive rate that suits your financial situation. By regularly seeking out lower interest rates, you can potentially lower your mortgage repayments and save a significant amount of money over the life of your loan.
Tip 3: Optimise Your Repayment Strategy
Making extra repayments and opting for weekly payments can have a substantial impact on paying off your mortgage faster. Instead of sticking to the minimum required repayments, aim to pay more on a weekly or fortnightly basis. This approach allows you to reduce the principal amount more quickly, resulting in lower interest charges and a shorter loan term.
Switching from monthly to weekly repayments can further reduce the interest charged on your mortgage. Since interest is calculated daily, making weekly payments can minimize the overall interest and accelerate your progress.
Additionally, by paying more than the required repayments, you can build up a redraw amount that provides flexibility and further reduces your interest payments over time.
Paying Off Your Mortgage Faster
Paying off your mortgage faster is achievable with the right strategies in place. By utilising offset accounts, staying informed about competitive interest rates, and optimising your repayment strategy, you can significantly reduce your loan term and save a substantial amount on interest.
Follow the expert tips shared by Kristen Pavez, a trusted finance broker, and take control of your mortgage. With consistent effort and a proactive approach, you'll be on your way to financial freedom and owning your home outright in no time.
Disclaimer: The information provided in this blog post is general in nature and should not be considered as personal financial advice. For specific financial guidance tailored to your situation, it is recommended to seek independent professional advice.