Pay Off Your Australian Home Loan Early

One true way to save money on your home loan is to pay it off early. When you work to pay off your mortgage early, the savings over the course of your loan can be significant. Here are some tips to help you with paying of your loan early.

Make Bi Weekly Payments

One easy way to pay down your Australian home loan sooner is to switch form a monthly to a bi weekly payment. For many, this is one of the most budget friendly means to pay back your loan early. Making biweekly payments allows you to pay half of your current monthly payment every other week. When you do this over a year’s time you will end up making 26 half payments. This ends up equaling 13 full payments, greatly reducing the length of time you will be paying off your loan.

Pay More

Another means of paying your loan off early is to pay extra each month. Some people like this option because it is flexible. Months when you have extra money you can put more towards the loan principle. Then, during months when funds are tighter you can just make the regular payment. Even adding a small amount to your payment each month will decrease the total amount you will pay over the life of your loan.

Refinance Your Loan to a Shorter Term

Another great option to consider if you want to pay your home loan off early is to refinance it to a shorter term. For example, if you currently have a 30 year loan term and can refinance to a 15 year pay back plan you can save a sizable sum. Refinancing to a shorter term not only takes years off your loan repayment but also lowers your interest rate. Just make sure you take the time to do a refinance home loan comparison to find the best option for you.

Large Sum Payments

A final way to pay your loan off early is to make large sum payments towards your principal whenever you can throughout the year. For example, if you receive a sizeable bonus at work or a large cash gift, this would be a good time to make a payment towards your loan. Always make sure that the extra money you pay towards your loan is put towards your principal.
Paying your home loan off early can save you a great deal of money over the life of your loan. Just be careful. Before you decide on any of the above listed ideas check your current loan agreement first to make sure the loan terms will allow you to pay back your loan early without facing penalty fees.

One true way to save money on your home loan is to pay it off early. When you work to pay off your mortgage early, the savings over the course of your loan can be significant. Here are some tips to help you with paying of your loan early.

Make Bi Weekly Payments

One easy way to pay down your Australian home loan sooner is to switch form a monthly to a bi weekly payment. For many, this is one of the most budget friendly means to pay back your loan early. Making biweekly payments allows you to pay half of your current monthly payment every other week. When you do this over a year’s time you will end up making 26 half payments. This ends up equaling 13 full payments, greatly reducing the length of time you will be paying off your loan.