Small sacrifices knock years off mortgages
Article by Mozo
As Aussies begin to feel the benefits of the recent rate cut, the Advertiser has pointed out that many could shave years off their home loan repayments.
The paper noted that as banks begin to pass on the rate cuts on home loan deals, residents could soon find themselves with more spare cash at the end of each month.
For example, Australians with a $250,000 mortgage can expect to see their repayments fall by $86 a month.
However, it pointed out that if this money was ploughed back into paying off the home loan, people could find they take years off their total repayment time.
“Add another two 0.25 percentage point rate cuts – which some economists are forecasting by the middle of next year – and the monthly saving of $172 would shave almost six years off the loan,” it claimed.
Meanwhile, the Sydney Morning Herald has reported that the problems affecting the US loans market are beginning to filter into the Australian economy, putting pressure on the Reserve Bank of Australia to cut rates again as early as next month.