How Does Revolving Credit Facility Work And How To Use It
Ways to pay off your home loan sooner
Save a little more before you buy
If you've started saving you may start looking at buying once you have around 10% of the purchase price. However, if you have less than 20% of the purchase price, you may need to pay Lenders Mortgage Insurance.
It may mean waiting a little longer, but if you can save a 20% deposit on your new home, you could avoid paying Lenders Mortgage Insurance.
Pay fortnightly versus monthly
Paying fortnightly means that there are 26 fortnightly repayments each year which adds up to the equivalent of 13 monthly repayments. That's one extra monthly repayment every year to help you own your home sooner.
This could work well if you’re paid fortnightly.
Benefit from extra and lump sum repayments
- Any extra payments you make will reduce the balance of your loan and the interest charged. Lump sums such as a tax return, a bonus from work, a gift or an inheritance can help you save on interest and shorten the life of your loan.
Even paying a little bit extra on a regular basis can make a difference in the longer term.
- Rounding up your home loan repayment just a small amount can make a dent on your home loan interest. For example, consider a loan amount of $300,000 at 5% over 25 years.
If the monthly repayments of $1754 were rounded up to $2000 per month and continued until the end of the loan term, the loan would be repaid around 5 years early, and the interest owed reduced by around $54,000.
Use a home loan offset account
A Westpac offset account allows you to offset the balance of your eligible transaction account against the balance of your Rocket Repay Home Loan. This means you only have to pay interest on the difference between these account balances, which could save you thousands on interest payments and cut years off the life of your home loan.
Our Rocket Repay Home Loan provides you with a 100% offset transaction account linked to your home loan. Every dollar you have in your transaction account saves you interest.
Regularly review your home loan
Over time, your personal situation or financial needs may change.
It makes sense to review your loan regularly to ensure you're only paying for the features or benefits you actually use or need.
We can help to assess your requirements and ensure you’ve got the products and services that are right for you at each stage of your life.