Mortgage Choice is encouraging homeowners to buy fewer Easter treats over the coming festive weekend and put that saving into their mortgage instead.
Warren O'Rourke, national corporate affairs manager, Mortgage Choice, said the smallest amounts of savings used as an extra repayment can have a respectable impact on the overall cost of and term of a mortgage.
"Consider the impact of $1,000 on a $225,000 loan with a standard variable rate of, say, 7.7%. If you pay an extra $1,000 lump sum payment into the mortgage with 25 years on the mortgage left to go, overall that will reduce the total repayments by taking two months off the loan term and saving over $3,616 in repayments," said O'Rourke. "If that were a $2,000 lump sum payment, you would save $7,153 and five months. Double that amount to $4,000 and you save $14,000 and 10 months.
O'Rourke said, festive season or not, paying an extra $10 off your mortgage per month can save you up to $3,234 and three months off the life of your mortgage.
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