Tuesday 7th February 2023
With interest rates on the rise, it is becoming increasingly difficult for people to keep up with their loan repayments. Fortunately, there are some strategies available that may help reduce the amount of money you have to spend on home loan payments each month.
In this blog article, we will explore three common methods for reducing your home loan repayment costs: refinance to a lower interest rate, lengthening your home loan term, and refinance to an interest-only home loan mortgage. Read on to learn more about these options and how they can help save you money! If you have not reviewed your mortgage in a while, now is a great time to get in touch and explore options.
Refinancing to a lower interest rate is one of the most popular strategies. This involves taking out a new home loan at a lower interest rate with a larger principal amount, then using the extra money to pay off other debts or put towards home improvements. Refinancing can reduce your loan repayments significantly and even better if the lender is running a cashback promotion.
Lengthening your home loan term is another way to save on home loan payments each month. By stretching out the timeline of your home loan, you can reduce your monthly payments without increasing the principal balance due in each payment. However, keep in mind that while doing this will save you money in the short term, you may end up paying more in the long term due to interest charges.
If you want to keep your home loan payments as low as possible, consider refinancing to an interest-only home loan mortgage. With an interest-only home loan, you only pay the monthly interest on your home loan rather than both principal and interest. This can help keep your home loan repayments at a minimum while allowing you time to build up equity in your home. Just be sure that you are able to afford the additional payments when they become due.
By utilising one or more of these strategies, you can significantly reduce your home loan repayment costs and save money each month. Keep in mind, however, that all these options should be evaluated carefully before making a decision, as they involve different risks and rewards. Once you have found the home loan solution that works best for your financial situation, you can start putting those savings to work for you!
If you would like to learn more about saving money on your home loan and ways to reduce costs, please get in touch with us today.