Mortgage Broker Reveals Keys To Paying Off Your Home Loan Faster

July 16, 2009 - PRLog -- Step 1: Increase your repayments

It might seem obvious, but the best way to reduce your mortgage is to simply increase your repayments. The simplest and most effective way to do this is to increase your regular repayment amount.

Paying fortnightly instead of monthly. There are 26 fortnights in a year but only 12 months, so by dividing your set monthly repayment in two and paying it fortnightly, you will be making one additional month’s mortgage repayment each year.

Making extra repayments whenever you can.

Keeping your repayments the same if interest rates drop at any time.

Next time you get a pay rise, put 50% of it towards upping your loan repayments.
Go to our Extra Repayments Calculator now to see what a huge difference just little extra repayments make over time. http://www.smartline.com.au/CalculatorsContents.html


Step 2: Get the right loan

Making sure that you have the right loan to suit your individual situation is important, and your Smartline Mortgage Broker will help you choose a loan that you are likely to be able to pay off faster. There are many loan products that offer flexibility – for example professional packs, line of credit loans, or standard variable loans with a redraw facility, or an offset account.

Step 3: Make every cent work

100 per cent offset accounts enable you to have every cent of your money working to reduce your mortgage rather than sitting idly in your cheque or savings account. Line of credit loans can achieve the same result but can be more difficult to manage as they are like giant credit cards and require great budgetary discipline from you for them to work effectively.

Step 4: Consolidate your debts

You can make significant savings in interest by consolidating all your loans – personal, car and credit cards – under your home loan, where the interest is usually at a much lower rate. Remember, however, that putting short-term consumables under long-term finance can prove expensive in the long run.

A Final Word:

Make paying off your loan easier: (1) Beware of mortgage minimisation sales people. Their services can be expensive, and they often recommend line of credit loans, which should be treated with caution. (2) We've said it before, and we'll say it again: pay off a little extra as often as you can. For example, if you pay an extra $500 into your mortgage every month you might think that would mean an extra $6000 a year off your mortgage, or $60,000 over ten years. Not bad.

In fact, compounding interest means that $500 a month for ten years would actually save you $90,000, assuming interest rates are 8 percent per annum. Even if you stopped paying the extra after those ten years, thanks to the extra already paid off, you would continue to save around $7000 every year – and that saving would grow every year.

For Smart Advice have a Smartline Personal Mortgage Adviser call you (we'll get back to you within 24 hours) or you can call us now on 1800 020 066. http://www.smartline.com.au

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About Smartline: Established in 1999, Smartline is an Australian-owned finance broking company which operates through independent franchise owners throughout Australia.

Our vision is to set the benchmark in Australian mortgage broking for client care.

All Smartline Mortgage Advisers are fully qualified and trained mortgage broking professionals who “live and breathe” home loans. They’ve joined Smartline because they are people who are motivated by getting great outcomes for their clients, every time. Stringent standards ensure that the loan application is hassle free. It works.

Smartline is the proud winner of two of the industry’s most prestigious awards for best mortgage broking group, the Mortgage and Finance Industry Awards 2007 and the Australian Mortgage Awards 2006. They were finalist in 2008 and 2009.