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The life hack saving home owners thousands

  • July 19 2019
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Invest

The life hack saving home owners thousands

By Cameron Micallef
July 19 2019

Millions of home owners are being urged to “make hay while the sun shines” as historic low interest rates make it easier for borrowers to pay off mortgages.

Finder

The life hack saving home owners thousands

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  • July 19 2019
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Millions of home owners are being urged to “make hay while the sun shines” as historic low interest rates make it easier for borrowers to pay off mortgages.

Finder

A new Finder analysis shows that home owners with an average variable mortgage who keep paying the same repayments as before the last rate cut could shave $40,000 and three years off their loan.

“If lenders were to pass on the full 50 basis point discount of the two rate cuts, in other words move a borrower’s rate from 4.91 per cent to 4.41 per cent, the new monthly payment could be $2,005.

“However, if borrowers paid that extra $120 a month toward their loan, they’d be saving $40,300 in interest 39 months (three years and three months) off their loan term,” stated Finder.

Graham Cooke, insights manager at Finder, urged borrowers to use the lower rates as a way to get in front on their debt. 

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“If borrowers are accustomed to that higher repayment amount, it won’t cause them any extra pain for a lot of long-term gain,” said Mr Cooke.

“If you can make additional repayments now, you’ll reduce the chances of mortgage stress if and when rates eventually do go back up,” he said.

“Mortgage debt is a major responsibility and there’s never been a better opportunity to get on top of it.

“If you truly want to feel the effect of these payments, make this a habit and not just a once off contribution,” continued Mr Cooke.

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The life hack saving home owners thousands
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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