Three more tips to pay off your debt faster
Continuing from previous months, here are our next three tips to pay your debt off faster. These aren’t presented in any particular order because everyone’s situation is unique. Just take the tips that work best for you and if you’ve got any questions, feel free to reach out to us, or ask your financial or mortgage adviser.
1. Review your mortgage repayments
With the recent drop in interest rates, it’s time to give serious thought to the level of mortgage payments you’ve been making. Rather than keeping your repayment at the same level to what it was before this rate cut, consider putting it up to the repayment level of the cut before that. Think back to 12 months ago, were you struggling to make ends meet? If not, you can afford to do it.
2. Prioritise your mortgage over your children’s student loans
If you have children at university you may be wondering if it’s a good idea to pay university fees upfront so that your children don’t start working with debt. While this may be controversial, allocate that money to your home loan instead. HECS-HELP debt is indexed to inflation, and under normal circumstances, inflation runs lower home loan rates. This will allow you to pay your home off sooner, which could lead to an earlier retirement. You can then spend more time looking after the grandchildren, helping your children save on childcare.
3. Make the most of your home loan structure
Many loans come with an offset account, or at the very least, a redraw facility. If you have separate savings accounts, an education account, or a holiday account, pool them together and get that money working against your home loan. If your home loan is costing you 4% per annum, then you’re effectively making 4% on your money and it’s tax-free too!
Whether you’re buying a home, an investment property, looking to renovate or simply want to check you’re getting the best deal on your mortgage, Orium Finance are experts that make it easy.
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