Congratulations, you’ve purchased your first home and now you’re facing a lifetime of debt to pay off your mortgage. Never fear! National Wealth Advisory is here to swoop in with some money-saving tips so you can slash your mortgage. It can be overwhelming simply thinking about facing 25-30 years of debt with the only consolation being, one day when you’re retired, it’ll be yours (possibly when you’re riddled with arthritis and too old to enjoy it!)
But our goal is to make sure you slash your mortgage, so you can:
- Pay off your dream home sooner so you can enjoy it
- Pay off as much as possible off your mortgage so when you upgrade to your dream home, you’ll be in a better position financially.
Even if you’re not a first home buyer, our loan-reducing hacks can be applied to any home loan or debt you own.
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Our top money-saving tips for first home buyers to slash mortgage repayments include:
1. Round up your mortgage repayments – By rounding up your mortgage repayment amount can make a significant difference without it affecting your lifestyle. Even if you can only afford an extra $20-$50 a month, it all counts and you’ll be debt-free sooner. Some banks offer the functionality of rounding up card purchases to the nearest $1 or $5, the extra amount is then transferred to your savings or can be added to any eligible home loan.
2. Opt for fortnightly repayments – By making fortnightly mortgage repayments you can reduce the length of your mortgage. If you do the math, you’ll be able to calculate that by switching to home loan payments every two weeks, you’ll end up paying around an extra month each year. It also reduces the amount of interest you need to pay.
3. Choose principal and interest repayments – If you can afford to take the option to pay both the principal balance and interest, you’ll get lower interest rates, than you would be entitled to if paying interest only loans. WIth each scheduled repayment, by the time you’ve paid off your home loan you will be surprised at just how much you’ll save on interest.
4. Use tax returns or cash windfalls towards your mortgage – Large sums of unexpected cash, whether it be inheritance from the death of a parent or your annual tax return or end of year Christmas cash bonuses, when paid down on to your home loan can make a significant difference and reduce the length of your loan.
5. Ask for a portion of your wages to be directed into a savings account – SImilar to salary sacrificing, you forgo an agreed portion of your wages that go directly into a savings account or towards your home loan by your employer. It’s a good way to stop yourself from being tempted by spending the money on extra luxuries such as Uber Eats or Lotto tickets. At the end of the agreement you should have made a considerable dent in your home loan or have a lump sum you can use to make an extra big repayment.
6.Stay up to date with interest rates and special offers from financial institutions – It’s tempting to just stay with the same loan provider for the life of your mortgage, because of the hassle that comes with refinancing or moving loan providers. However, by staying put you could be doing yourself a disservice. Why pay more than you have to, simply because you can’t be bothered?
Every 2-3 years it pays to evaluate your home loan. Is there a lower interest rate, the potential to consolidate all your debt or just a better offer? Of course, you’ll need to weigh up the pros and cons of moving loan providers, there are refinancing fees to take into consideration. National Wealth Advisory can connect you with recommended mortgage brokers and investment strategists who can help you determine whether you should refinance or not.
7.Cut back on unnecessary extras – While it’s nice to have access to Binge, Stan, Netflix, Disney Star and Amazon Prime, or ordering food delivery, there are ways you can cut back on spending without depriving yourself of the special things that make life worth living. Choose one streaming network instead of all of them, pick up your own takeaways rather than paying for delivery, even remembering to take your recyclable grocery bags to the supermarket can save you money.
You’ll be surprised how fast the little savings add up.
To access a full range of money-saving tips to slash your mortgage, reach out to our financial advisory service today. Our team is ready to help you save potentially thousands so you can be mortgage-free sooner.