Pay home loans quickly to reduce impact of interest rates

Thursday 21 July 2011

Article by Mozo

Aussies who are taking out home loans and buying a new property should consider paying off as much as they can each week in order to minimise their interest payments.

Pay home loans quickly to reduce impact of interest rates

This is according to Mortgage Choice spokesperson Kristy Shepherd, who told Your Mortgage magazine that even a small amount like $25 each week could make a significant difference.

She explained that paying off home loans early could also give Aussies access to equity to use as security to improve their property or even purchase another one.

"There are many advantages to repaying your mortgage quickly. Not only will you own your home sooner, but you can also avoid hefty interest payments," she stated.

Ms Shepherd also warned against delaying payments and making them late, as this could result in greater interest being incurred and could have an adverse effect on credit scores.

Figures releasesd by the Australian Bureau of Statistics revealed that there was a 4.4 per cent month-on-month rise in home loans approvals in May.

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