Have you ever wondered about the best way to try and pay your home loan off ahead of time?
We're going to show you what we think is one of the best ways to attack your home loan and make it easier to get ahead, so that your mortgage is smaller and you have more freedom and choice with things that you would like to do.
The best way to try and reduce your home loan is to make small, regular repayments consistently.
Using the example of a loan of $500,000 at an interest rate of 4% per annum over 30 years, let’s see how much you can save on the interest on your home loan as well as the years by paying a little bit extra?
If you contributed an extra $50 per week, you would save just over $59,000 in interest and save 4.4 years on your mortgage.
A $100-a-week extra contribution would save you just over $100,000 in interest and 7.6 years. Whilst a $200 per week extra contribution would save you over $150,000 and save you 12 years on your mortgage. (This assumes that the interest rates stay at 4% however over 30 years they’re likely to move. So that would obviously have an effect on these numbers).
This shows you the power of a small, regular contribution, and what sort of impact that can have for you over time. If you thought about a $200-a-week contribution that enabled you to pay off your home 12 years sooner than just paying the minimum, what sort of choices you might have if that were to happen?
