Pay off home loans faster to reduce overall cost

Monday 25 July 2011

Article by Mozo

Aussies have been advised to consider increasing the amount they spend repaying their home loans each month in order to reduce the overall cost of their property.

Paying off home loans early 'a sound idea'

Tony Meredith, executive manager of personal lending at Suncorp Bank, told National Features that savvy Aussies could significantly cut the amount they pay for their house if they make larger repayments.

He explained that depositing a $2,000 lump sum into an average £300,000 mortgage could knock eight months of payments off a 30-year term and save almost $12,000.

"By paying even an extra $20 per fortnight off your mortgage, you can make a significant difference to the balance," he stated.

The expert recommended that Aussies look closely at their financial situation and evaluate where they spend unnecessary amounts of money.

Mr Meredith's advice echoes that of Mortgage Choice spokesperson Kristy Shepherd, who told Your Mortgage magazine that paying $25 extra each week could make a substantial difference to the cost of a home.

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