Everyone wants to own their home sooner.
Regardless of the state of your bank balance, there are things you can do to reduce your mortgage quicker. Whether you’ve already had a home loan for years or new to a long term loan, check our tips below to help you save money and own your home sooner.
Fortnightly or weekly instalments
This is an easy option, that doesn’t depend on whether you have cash savings or lump sum payments. By making fortnightly payments, rather than monthly, your dream will become a reality sooner, and you’ll save on interest. You could save more than $26,000 in interest over the life of your loan, and pay it off 3 years sooner. Use our How Long to Repay Calculator to work out how you can save money1.
Offset Home Loan
Offset accounts allow you to offset your savings against your home loan principal and therefore you pay less interest on your loan. This means that the balance used for the calculation of interest on your loan account will be reduced by the balance of your linked Offset Home Loan savings account. Summerland’s Offset Home Loan option also allows additional payments, lump sum payments and loan redraw.
Make extra repayments over and above the minimum required
Every bit counts! Maybe you could go without that smashed avo on toast once a week, or swap one day of buying your lunch for a home-made lunch. You could be paying an extra $20 per week on your loan. This equates to an extra $1040 per year, which over a 25 year loan could save you $15,327.79 and wipe 1 year and 9 months off the term of your loan2.
Check our saving money online tip sheet for more ideas on how to cut spending, and use our Extra Repayments Calculator to see how much you could be saving.
Lump sum payments
If you are fortunate enough to receive a tax return, work bonus or have residual from the sale of a vehicle, paying this onto your mortgage will help reduce the amount of interest you pay. Check how much sooner you could own your home with the Summerland Lump Sum Payments Calculator.
Keep your repayments the same if the interest rate drops
If the interest rate on your loan drops and you are in the same financial situation, keep paying the same repayment. The extra you pay each week or fortnightly will add up quickly and before you know it, you could be weeks ahead in repayments.
Have a free money health check
Call our Contact Centre on 1300 802 222 or drop into your local branch to talk to a staff member about a Money Health Check. We may be able to help you save money and reduce debt at the same time.
Use our tools and calculators
Check the tools and calculators page of the Summerland website, where you will find calculators to help you with borrowing, achieving your goals and budgeting.
If you’d like to discuss owning your home sooner with a Summerland Banking Specialist, please leave your details below and we will contact you. Alternatively you could call our local Contact Centre on 1300 802 222, or drop into your nearest branch.
1. The calculations are based using the Summerland How Long to Repay Calculator, for a $350,000 loan over 25 years at 3.97%pa.
2. The calculations are based using the Summerland Extra Repayments Calculator, for a $350,000 loan over 25 years at 3.97%pa.
The calculations are indicative and act as a guide only. The economic information was prepared from a variety of information sources, based on the information available at the time of publishing. We believe that the information in this report is correct and any opinions, conclusions or recommendations are reasonably held or made at the time of compilation, but no warranties are made as the accuracy, reliability or completeness. Summerland Credit Union does not accept liability to any person for loss or damage arising from the use of this information. This information is an indicative guide only. This material contains general advice only and does not take into account your individual objectives, financial situation or needs, and you should consider whether it is appropriate for your particular circumstances. Further information and our dispute resolution process is available at www.summerland.com.au or by phone on 1300 802 222. Conditions, fees and charges and eligibility criteria may apply. See us for details. Summerland Credit Union ABN 23 087 650 806. Australian Credit Licence 239 238.
