Interest rates are at an all-time low, but Kiwis are still struggling to pay off their home loans.
As a nation, our mortgage debt currently sits at $265 billion – increasing by 6.3% in the last year.
However, a few simple steps could reduce the life of your loan and help you repay your mortgage sooner.
Make sure your mortgage works for you
While a lower interest rate could help you repay your home loan early, there are other features worth considering.
If you’re currently making interest-only payments, switching to a principal and interest loan could help you get out of debt faster.
And, an offset account could help you lower the amount of interest paid over the loan term.
If you don’t think you’re getting the best deal or you’re coming off a fixed rate, a Mike Pero Adviser can help you shop around and find the home loan that suits your needs.
Cut down high-interest debt
High-interest loans and credit cards make it difficult to focus on your mortgage, so it’s a good idea to repay these as a priority.
Try to pay the full balance on your credit card each month, or consolidate this debt with a low-interest personal loan.
With a manageable repayment schedule, paying off your existing debt could be much easier.
Skip the luxury expenses
If you want to get ahead, you may need to look at your budget and consider where can curb your spending.
Small changes can make a big difference. Paying an extra $100 a month on a $400,000 loan could see your mortgage repaid almost three years earlier – and could save you around $40,000.
For more information, contact your local Mike Pero Adviser today.