Tuesday 28th June 2022
Finding the right home loan and the best way to pay it off can seem insurmountable alone. But with the help of an experienced broker, it’s much easier finding terms that will suit you. Read on for our guide on why and how to repay your home loan quickly.
The most common home loans
It’s easy to see why it can be intimidating picking the home loan that suits your situation when there’s so much choice! To help, here’s a rundown of the most common home loans:
Principal and interest loans
These are often standard, with borrowers making regular payments against the amount loaned, including interest charges, over a 25-30-year period.
Interest only loans
These require payments to cover the interest of the loan only. The actual amount you borrow will only reduce with extra payments.
Within both these loan products, there can be a variety of different interest rates, including:
Why repay it quickly?
Once you have secured the right home loan and purchased your dream property, it can be tempting to rest on your laurels and worry about repaying your debt later. The Australian Investments and Securities Commission shows this is a common mistake – repaying your loan as quickly as possible will often save you money in the long run.
The larger your loan, the more interest you’ll pay on the principal debt, and if you ignore or fail to keep up with your payment schedule, you’ll start to struggle.
How to repay your home loan quickly
For more information on loan repayments or finding the right home loan, contact our team today!