Nila Sweeney

1. Make more frequent payments. Sounds simple enough, but setting this as a goal is essential to your overall strategy. If you have any free cash, don’t let it sit around in your bank account – put it straight into your mortgage payments. The more you shave off the amount owed, the greater your equity becomes, and your future borrowing power too.

2. Set a budget. Plan carefully how much you can really afford – especially if you’re going to pay your bills with a credit card (see below). This is an essential part of a mortgage repayment plan.

3. Pay fortnightly rather than monthly. Ultimately, a structure whereby you pay half the usual monthly repayment fortnightly means you make about one payment extra a year. There are around 4.35 weeks per month in a 365-day year, or about 26 fortnights. With that in mind, paying $2,000 per month would net $24,000 in total payments. Paying $1,000 fortnightly would equal $26,000 in the year. This costs $2,000 more annually in this particular case, but it’s a method of increasing your payments in a balanced way.

4. Use a mortgage offset account to reduce the loan interest. A standard variable rate loan generally offers you the option of putting 100% of your income and savings into an offset account to reduce your loan interest. So, by paying your income directly into this account you can take a big chunk out of the principal.

5. Pay the first home loan instalment as soon as you settle. By making a repayment on the first day, you can reduce the principal immediately – and therefore all future interest repayments.

6. Align your loan repayments with your income cycle. Synchronising the repayments with your payday eases the budget process. Then you can always make the mortgage repayment one of your priorities – and spend on other items out of the rest.

7. Don't lower your minimum regular payment if interest rates fall. Interest rates have dropped lately, and it’s tempting to see it as an opportunity to get more cash to spend. If you had the discipline to pay the higher rate before, you should use this opportunity to pay off your loan faster.

8. Split your loan. Choosing between the security of a fixed rate loan and the flexibility of one at a variable rate can be difficult, especially when it’s not clear if interest rates will go up or down in future. Splitting allows a borrower to get some of the benefits of both – limited exposure to any volatility as well as protection from it.

9. Pay your expenses with a credit card. This option takes solid budgeting and discipline – and it’s not for everybody. However, if you use your credit card to take care of, say, $1,000 in bills per month, and you are able to pay that amount of debt off each time, you could have that $1,000 on your mortgage permanently.

10.Use internet banking for automatic repayments. A solid budgetary tool, this method gives you greater control over your repayments, as you can always alter what is drawn automatically. 

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