Paying for your home loan sometimes eats up most of our monthly budget. It’s hard. But we cannot ignore it as a home is a major necessity. But did you know that you can save on your home loan?
Here are some proven strategies to pay less interest on your home loan. Please note that these strategies will still be effective on all types of interest rates.
Find the cheapest home loan
The best way to save on your home loan is to compare interest rates. But this can be difficult and a bit complicated. Loans with cheaper interest rates can have higher monthly fees.
Other lenders also offer the so-called honeymoon rate, in which the rates and fees are low but once the honeymoon is over they charge higher rates of interest and other fees.
The best way to get out of this complicated maze is to have an expert assist you.
Home loan consultants spend every day comparing home loans and using their knowledge and expertise to find cheaper loans for clients.
Make extra repayments
Paying extra off your home loan - either on a regular basis or with the help of a one-off financial windfall - can save you a small fortune in interest repayments over the long term (especially when combined with finding a cheaper loan.)
An offset account and a credit card can be powerful allies
Most home loan providers calculate the interest bill based on your account’s outstanding daily balance. So if you can reduce your daily balance, the interest you will be charged will be reduced.
One way to do that is to use a 100% offset account. This account sits on top of your home loan account, and has direct links to your home loan.
Consolidating your loans is a good idea
Do you have a number of loans with differing terms and interest rate charges? If you do, it might pay to consolidate them all into one loan (usually your mortgage because it usually has the cheapest interest).
Good planning will save you a small fortune
Aside from the proven strategies mentioned, the best way that you can save more on your home loan is planning, computer modelling and research. Use the strategies above that will suit you and your budget.
Understanding your need to save more on your home loan, we, at HTA Wealth have the experience and the resources to advise you on which strategies you should use and when to use it. We can also help you avoid home loan pitfalls.
To know more about us and our service offerings, just contact us here.