With property prices going up, purchasing real estate in Australia and taking out a mortgage is costly, and as a result, many Australians are taking charge and freeing themselves of mortgage debt sooner.
Depending on how home loan savvy you are (let’s face it, many of us don’t want to think about it), you’re probably aware of some strategies you can use to both save interest and reduce your loan term.
It’s promising that Australians are being proactive about repaying their mortgage and opting to pay down their debt faster, but how are they actually doing it?
A new finder.com.au survey of 2005 Australians revealed 89 per cent of borrowers have tried to repay their home loan faster, with the majority (60 per cent) opting to make additional repayments.
Around 40 per cent of borrowers make more frequent repayments either on a fortnightly or weekly schedule, while 34 per cent of borrowers use an offset account to lower their interest charges. Negotiating for a better interest rate with an existing lender (18 per cent) and refinancing to a new lender that offers a lower rate or other money-saving features (12 per cent) were also identified as ways of fast-tracking mortgage debt.
Women are marginally more likely (90 per cent) to repay their mortgage sooner, compared to their male counterparts (88 per cent).
Is it worth the hassle? How much can I actually save?
Your home loan is the largest financial commitment you’ll have during your lifetime, and one you’ll be chipping away at for 25 - 30 years, but are the savings worth the effort?