Interest saving strategies
With an interest rate reduction tipped for later this year (possibly two reductions, according to some), there has never been a better time to make significant headway on your mortgage debt. Make hay while the sun is shining? Absolutely.
Below I’d like to share with you, our ‘effortless, interest-saving strategies’:
- Offset Account – Use a transactional offset account and have your salary deposited into this account. Every dollar in this account will save you interest on your mortgage
- Pay More Often – Mortgage interest is calculated daily, so paying your home loan fortnightly instead of monthly can save you a lot of interest and shorten the term
- Extra Repayments – If you’ve got surplus cash, commission or bonus money, pay it straight into the mortgage account. This will take the money out of view whilst still being available in redraw if needed (but try to keep it there)
- Use a Credit Card – Using a 55 day interest free credit card for your monthly expenses will maximize your offset account balance performance because your money is untouched. Pay off the card within the 55 days and you’ll save interest on your home loan, plus you could earn some frequent flyer points to boot
- Consolidate – Any high interest debts which are not tax deductible, like existing personal loans or unpaid credit cards, can be rolled into the mortgage at a lower rate
- Ongoing Review – A mortgage is not a set and forget facility. Use a professional mortgage advisor to review your mortgage debt/s and work hard to save you time and money
You don’t know what’s around the corner, so being ahead in your repayments can be a great safety net.