How to Pay Off Your Home Loan Faster and Save Money

You'll often hear people say that a home loan is the biggest debt you'll ever owe in your entire life. Indeed it is, and it's also the one you have to pay for the longest. On average, home loans have a term of about 30 years. Don't you just wish you could pay less and close the debt off sooner? In fact you could. What's important is that you take a strategic approach towards this. Knowledge is important too. Thus, we recommend that you read this article where we show you some ways you could pay off your home loan faster and save money.

Pay It Off As Fast As You Can

Pretty obvious, right? However, let us explain. Paying off your mortgage sooner doesn't only mean you'll get rid of the debt faster. It also means that you would be saving money in the process. The reason for this is that the shorter your repayment terms, the lower the interest rate. Sure the monthly repayments are bigger, but it helps you effectively achieve your goal. Where do you get the extra money for this? Let's move to the next item.

Be Wise With Your Money

It takes all sorts of ways to be wise with your money. You should realize that your resources are limited. With that in mind, try to live within your means and try not to make additional debts unless you really have to. Think of it as a financial diet. You're tightening your belt for a reason, that is, to pay off your mortgage sooner. To do that, you might have to give up some of your "vices", such as shopping for luxury items, going on frequent vacations, or eating out in classy restaurants.

Consider a Combination Loan

You could switch loans when interest rates become favorable. However, it could be costly due to switching and exit fees, and other associated fees your lender might require. Having a combination or a split loan lets you enjoy the best of both worlds. With one half of your loan on a variable rate, and the other on a fixed one, you would still benefit even if the rates become volatile or go on record lows.

These are just some of the strategies you could employ if you want to pay your loan off sooner. Of course, there are the tried and tested ones like switching loans and negotiating your terms with your lender, so consider those too.

To get an even better deal on your home loan, consider speaking with the professional advisors at Rate Detective today. They will help you find the best deal from Australia's top lenders based on your needs and your budget.

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Published on October 10-th, 2012 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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