Pay off your loan faster - The power of an extra $100 a week
343 words | 1.5min Read Time
A common question we get from our home loan clients is ‘How can I pay off my home loan faster?”. We love helping our clients find ways to pay off their mortgages faster, if their goal is to be mortgage-free sooner or to unlock extra value in their property to put towards things like the purchase of an investment property! Making extra loan repayments can also give you additional financial buffer in your offset or redraw facility should you ever need it in an emergency.
When it comes to making extra loan repayments on a mortgage, there are a lot of things to consider including your personal situation and the type of loan you have, but we've run some quick numbers on the power that an extra $100 a week towards your home loan can make.
On a principal and interest home loan with a term of 30 years, most home loan clients spend a considerable amount of time during the first ten years battling with the cost of the interest component. If you can add an additional $100 to your loan repayment each week, it will reduce the amount of interest you pay, saving you money and reducing the length of your loan. Let's say you have a $300,000 principal and interest home loan for the house you live in (owner occupier), at an interest rate of 3.5% over 30 years. If you were to pay an extra $100 per week, you could save a total of $71,000 over the life of your loan.
Currently, interest rates are at extreme lows, so now is a great time to take advantage of these low rates and make extra loan repayments, which could mean you pay down your home loan even quicker.
It’s important to chat with a home loan expert about whether this is right for you and your personal situation, and that’s why our friendly local team are ready to sit down with you to help make your property dreams, a reality! Call your friends in finance at JLH Finance Advisory today!