With the media’s focus on home loan interest rates, it’s easy to lose sight of the fact that other home loan features can also be used to actively save years off your home loan.
If your aim is to be mortgage-free sooner, rather than later, it’s important to make sure your home loan isn’t just the cheapest on the market, but also the most flexible.
Last week the Reserve Bank of Australia released information that indicates that more and more home buyers are building a buffer on their home loan – just in case something happens in our tough economic times.
Home loan features such as the ability to redraw money out of your home loan, or the ability to store your savings in an offset bank account that is attached to your home loan, allow you to park your hard-earned savings in a place that reduces the cost of your mortgage.
There are multiple benefits of placing your savings in your home loan or offset account. The most obvious is that it will mean that you will pay less interest on your loan and, it’s also likely that the financial benefits of paying less interest will far outweigh any interest you would earn on your savings if it was placed in a traditional savings account.
When looking at a new loan, ask your Geelong mortgage broker “how many ways can I potentially save money”:
- Does the loan have a low interest rate?
- Can I negotiate a further interest rate discount?
- Can I save interest by putting my savings in an attached offset savings account?
- Does it have a redraw facility to store my savings, reducing the interest I will have to pay?
- Is the lender asking for a yearly fee in exchange for these features?
Anyone can find a home loan – but unfortunately most choose the wrong loan and unnecessarily pay a mortgage for years after they should’ve been mortgage-free.
Konnect Financial Services is a Geelong mortgage broker who finds home and investment loans that re-Konnect our Torquay clients with their dream home or secure financial future.
Contact Konnect Financial Services to speak to one of our Geelong mortgage brokers.