With the World economy in disarray, many people are asking themselves how am I able to save cash on my mortgage? The price of living has gone up in most developed countries and it certainly has in Australia. At the same time most workers in the economy have not had a rise in wages though folks in the mining economy have and thus Australia now has a” two speed economy”.
One of the best methods to economize on your mortgage is to always pay more than the minimum payment on the claimable debt. That way there is more equity left for you to take a loan against for investment purposes. The more debt that is deductible, the more cash you will have left to invest.
A second way to save cash on your home loan is to pay your home loan fortnightly instead of monthly, as there are 26 fortnights in a year and a little less (24) fortnights in 12 calendar months. So really it's the same as paying a little more each year.
The third way of saving cash on your home loan is to pay lump sums off in chunks when you get additional money, this way your loan will be payed down much more quickly as you are not amassing as much interest in the long run.
I think truly with your home loan there isn't any magic silver bullet but if you pay it down slowly chipping away at the debt bit by bit,eventually the loan should get repaid. Also one thing regularly forgotten is the most cash you’ll make will be from the rise in capital property value and possible rent from your investment property, instead of by paying the debt down and here is where most investors focus is, although it can pay to also keep an eye on costs. Plenty of our customers trust us to keep the expenses down while they look after the capital investments. For more videos on investing in property in Australia visit my media page.
Virginia Graham is a mortgage broker and Central Coast Mortgage Broker andfinance expert, who has been featured in the Australian media.
