Is this the year you take control of your home loan?
If you have a mortgage, there are key three things you can do this year that will really make a difference to your financial life, now and into the future.
Pay off your mortgage more quickly
Paying off your home loan is a big goal for most homeowners.
While that might not be something you can achieve in its entirety in one year, you can put yourself on a path to paying it off significantly faster.
Depending on your situation, you might choose to increase your regular repayments, make one-off payments from time to time, or save up and put a big lump sum on your loan.
Any extra payments you make can have a big impact, particularly at the start of your loan.
If you have a $500,000 loan with a 5.99 percent interest rate over a 30-year term, for example, you might pay about $690 a week. But if you can increase your payments to $700 a week, you could be on track to pay off your loan one year early. Paying $750 a week could clear it almost five years early, according to Sorted’s calculator.
This assumes that interest rates stay the same for the term of your loan, which they won’t – but if rates rise again, you stand to save even more if you’ve reduced the amount you owe.
When your loan comes up for refixing, you can set your payments higher, or make one-off payments, without penalty.
If the loan is fixed, there is likely to be a limit to how much extra you can pay off without incurring a fee. We can help you to work out how that might apply in your case.
Find sharp rates when refixing
Interest rates have been falling since the middle of 2024, and it’s likely that when you come to refix your loan, you may be able to move to a cheaper rate.
It’s worth looking at your options for refixing. Sometimes lenders are willing to negotiate a little on their advertised rates. We can help you to work out what might be available to you and what is a good fit for your circumstances.
Boost equity in your home
Homeowners boost equity in their homes by paying off their home loans, but you can also increase your equity by making improvements to the home that increase its value.
That might mean doing renovations, or additions to the property, or just working on general improvements.
Having higher levels of equity may put you in a position where it is easier to borrow against your property in future – perhaps when you want to buy an investment property.
If you bought with a low deposit and have been paying a low-equity margin, you may be able to negotiate to have this removed if your work has improved your position.
We are here to help
The LifeDirect Mortgages team is here to help you get on track with all your home loan goals. Whatever you’re working towards, drop us a line at 0800 800 400. We can help you to look at the mortgage options available to you, and discuss the strategies that could be appropriate for your situation.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.
