Pay off your home loan faster with these 5 tips
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Pay off your home loan faster with these 5 tips
Your obligation to your home loan is one that will most likely be over a minimum of 20 years. While making your scheduled home loan repayments will work, it is in your best interest to repay your bond ahead of schedule. Implementing steps to do so could take of a few years off your bond, as well as saves you the added interest.
1. Pay extra into your bond account every month
Practise this from the start to ensure you get used to this way of doing things. Following this step may be difficult at first, but working diligently with your earnings will benefit you in the long run.
2. Pay large amounts here and there
Do your best to pay large amounts into your home loan when possible. Paying a few extra thousands into your bond when possible can take off your repayment amount, and doing this two or three times a year will be sure to make a difference.
3. Set a target date to pay off your bond by
Set a date of when you would like your bond to be paid off, work out how much you will need to pay monthly to complete this, and keep to that date as much as possible. Paying off your bond early will still make a significant difference.
4. Put annual bonuses and tax rebates toward your bond repayments
Annual 'cash backs' into your account are always a welcome gift, and can be used towards your home loan repayment as an additional inflow of cash, therefore reducing your repayment.
As they are mostly unexpected, they won't necessarily interfere with the amount allocated to this payment beforehand. A large cash injection into your bond could be the perfect way to spend your year-end bonus or that investment that just matured.
5. Make your bond repayment earlier in the month
As interest rates are calculated daily, do your best to make your payment earlier in the month to have your interest calculated at a consistent amount, leaving less variables to chance. Doing so will also help you get into a regular routine.
Author: Property 24
