Tips on Paying Off Your Home Loan Sooner

With mortgage terms ranging from 20-40 years, they sound more like a prison term than a home loan. However, the great thing is that you could pay off your home loan sooner if you know how the experts do it. By settling your debt sooner, you'll be able to focus on other important things in your life. You could retire sooner and spend your extra money the way you like it.

For this reason, we're sharing with you a few tips on how you could pay off your loan sooner. So if you're ready then let's get started, beginning with...

  1. Settle your smaller debts first. Your credit card debts and car loan typically have higher interest rates than home loans. Because of that, it helps to focus on paying off these debts first. Once you settle them, you will be able to move in faster since you only have your home loan to focus on after.
  2. Consider interest-only payments. Principal and interest repayment is the most common option when it comes to repaying your loan. However, other arrangements such as interest-only payments allow you to pay only the interest in the first few years of the loan. This will help you slash off the fairly volatile portion of you loan (since interest rates change every so often), and then deal with the bigger chunk of it (the principal) later on.
  3. Pay more. It may sound counterintuitive but paying more for your mortgage will enable you to pay it off sooner. Add to that making more regular payments than your typical monthly repayments (you can also pay fortnightly or weekly), and you'll be taking years off your term.
  4. Find the right mortgage for your needs. The market and interest rates are subject to changes. Because of that, your current home loan may no longer address your needs several years from now. It is therefore important that you review your home loan periodically and see if it still fits your needs. For example, you might be able to take better advantage of the recent cuts in interest rates by moving to a variable rate loan instead of a fixed one. You'll potentially save more money in the process.

And when it comes to finding the right mortgage for your needs, the best people for the job are the qualified advisors at Rate Detective. They will assess your needs and provide you with personalised rate comparisons of Australia's top lenders. This allows you to find a home loan that is truly perfect for you. Contact us today!

Get your quotes now

What to find out more? Enquire now

Published on November 11-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.
Enquire about Home Loans
Please enter the estimated value of the property

Important Information

Not all providers in the market are included in the comparison.

Any information or advice contained on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs.

Related Topics