We know how stressful it can be to keep up with your mortgage repayments, so we thought we’d share some mortgage repayment tips with you. These tips should make paying your mortgage easier and could potentially cut years off of your repayments. Happy saving!

1. TIPSFOR
MANAGING
YOUR
MORTGAGE
REPAYMENTS
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2. We know how stressful it can be to
keep up with your mortgage
repayments, so we thought we’d
share some mortgage repayment
tips with you. These tips should
make paying your mortgage easier
and could potentially cut years off of
your repayments. Happy saving!

3. CREATEABUDGET
Once you have found a loan with a
repayment plan that suits your
lifestyle, you need to make sure that
you set yourself a realistic and
manageable budget that will help
you to keep up with your
repayments. Establishing a routine
and sticking to a budget is the most
effective way to manage your
financial well-being and prevent
money worries from taking over your
life.

4. ALIGNPAYMENTSWITH
YOURSALARY-MAKETHEM
WEEKLYORFORTNIGHTLY
Aligning your repayments with your salary cuts down
your interest payable and will potentially save you
thousands of dollars in the long run. Let’s look at this
example from Intuitive finance - Say your monthly
repayments are $2,000. By the end of the year, you’ll
have repaid $24,000 (not accounting for interest). If
you change this to $1,000 a fortnight, by the end of
the year you’ll have repaid $26,000. How? Because
there are 12 months in a year… and 26 fortnights.
Basically, you squeeze in an extra month each year,
which can take a couple of years off your mortgage.
You might as well do everything in your power to pay
your mortgage off as soon as possible!

5. ONLYREDUCE
PAYMENTSASALAST
RESORT
When variable interest rates fall, many borrowers decide to
reduce their repayments. Although this is necessary when
finances are really tight, if you can manage to keep your
repayments as they are, do so. This can help you to pay off
your loan more quickly. On the other hand, if rates have been
constantly steady, consider adding an extra $20 or so onto
your regular payments. The more you pay now, the better off
you’ll be down the track!
Have you applied to reduce your repayments with an interest
only loan structure? If so, check out the government’s
MoneySmart - it has some useful information for customers
using an interest only repayment period and some easy to
follow infographics highlighting the advantages and
disadvantages of this type of lending structure.

6. HAVEANOFFSET
ACCOUNT
An offset account is a transaction account that is linked to an
eligible home/investment loan. When you have an offset account,
you don’t earn interest on your savings. Instead, the interest on your
savings works to reduce the amount payable on your loan.
The more money you have in your offset account, the less interest
you will need to pay on your home loan.
PUTLUMPSUMSINYOUR
MORTGAGEACCOUNT
Although it’s tempting to put lump sums (like tax refunds, work
bonuses, inheritance or dividend payments) into leisure purchases,
consider investing them into your mortgage instead, as large lump
sums can cut years of interest off your loan term. If you want to pay
off your mortgage as quickly and efficiently as possible, the pool
table might have to wait!

7. PAYMORETHAN
MINIMUM(IFYOU
CANAFFORDTO)
Did you know that when you pay the bare minimum on your
loan, most of your monthly repayments go to paying off
interest? This means it can take you years to significantly
pay off your debt.
Paying a little more than minimum can help you to start
chipping away at your loan balance now, and potentially
shave years off your repayments. Let’s look at this example
from AFA Website: Imagine you have a $300,000, 30-year
loan at 5.08% pa interest, with repayments of $1,625 a
month. By increasing your repayments by just $100 a month,
you can pay off your loan more than three and a half years
sooner, and save $42,000 in interest. Increase your payments
by another $100 a month, and your mortgage could be paid
in full after just 23 years, with interest savings of more than
$73,000.

8. YOUROVERALLGOALSHOULDBE
TOPAYYOURMORTGAGEOFFAS
QUICKLYASPOSSIBLE,ASTHIS
WILLSAVEYOUTHOUSANDSOF
DOLLARSINTHELONGRUN.FOR
MOREINFORMATIONABOUT
MANAGINGYOURMORTGAGE
REPAYMENTSEFFECTIVELY,
CHATTOYOURMORTGAGE
BROKERORAFINANCIAL
ADVISOR.
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