Increasing your mortgage repayments at the start of the loan could save you thousands of dollars.
Making additional repayment beyond your minimum monthly repayments, you will save thousands of dollars by cutting the amount of interest you pay on your loan, as well as potentially cutting years off your loan (in some cases).
According to Canstar*, a $500,000 25 year mortgage could see you paying approx. $440,000 in interest alone. You can reduce the amount of money you lose paying off the interest on your mortgage, simply by increasing your loan repayment amount. As a rough guide, every $25 in extra repayments you make early in the life of your loan, saves $50 in interest over the term of the loan (depending on the level of interest rates).
So if you want to thwart the negative effects of compound interest and reduce the money you lose to it, consider increasing the amount of your regular mortgage repayments or make lump sum repayments when you have a larger than normal amount of savings.
With BMM variable rate loans, you are able to make additional repayments without penalty. However, if you have a fixed rate loan, additional repayments will be subject to restrictions depending on your loan product.
If you have any questions about varying repayments on your loan, please contact our friendly Customer Service team on 1300 662 661 or email@example.com.
Posted on: 21-Apr-2016