Best Tip for Saving Money on Mortgage Interest

[alexwilson101]

I am curious what the best possible way of reducing interest payments on your mortgage would be?

Currently I pay the mortgage fortnightly to reduce interest incurred, but would love some other handy mortgage payment tips!

[Kayla]

I would strongly consider a mortgage offset account.

It will allow you to create a large savings account for your next house or savings goal all while minimising interest payable on your home loan.

Have a quick search for it online and ensure you get a 100% offset account and it may surprise you the benefits it allows!

[darren kane]

I have one of these (a savings offset account) for my mortgage - they are awesome! It's a standard Westpac Classic Plus account (ATM card, the works) but any money in there offsets my mortgage!

Highly recommend one of these your for as the best way to save money on your mortgage!!

Cheers
DK

[prasad581]

hello alex wilson, please beware of "Zero Point" or "Zero Cost" loans. They are sucker loans. Nothing is free!

if you’re a first time buyer looking to save money on your repayments so you can get on the property ladder, an interest only mortgage may be what you need. With an interest only mortgage for a set time (usually a few years) you will pay back the interest you owe on your loan. This can be a great way of saving money for the first few years of your mortgage. It is, however, only a short term plan. As soon as you can afford to make proper repayments you should do so, it will reduce the amount of time it will take you to repay the loan and the amount of interest you repay overal

[carole]

You should also break down the payments to a weekly amount. For example if the monthly amount is $1000 a month. Then you should pay $250 weekly. When their are 5 weeks to a month your adding one extra payment. Also you should try to pay extra where you can.Always round up. One of my mortgage payments is $450 a week. I pay $500. It is only an extra $50 but you add that up over a year. Even if you only pay an extra $10 -$20 it all adds up.

[will.sheila]

If you’re a first time buyer, it is important to find the best deal that suits you. An "interest only" mortgage may be what you need. With these mortgage, you will pay back the interest you owe on your loan for a set time (usually a few years).

[skella]

I agree with Carole, after being a Mortgage Broker in Australia for over 10 years I've figured out the only way to reduce your interest is to make extra repayments. Simple, paying weekly (1/4 of monthly) or paying fortnightly (1/2 of monthly) is good but anything you can do makes a huge difference in the long run. Especially if you have a 30 year mortgage.

As a rule of thumb paying $1 off the principal at the beginning of the mortgage will save you $2 in interest. So pay off as much as you can at the start.

[ClaireBear]

Steve - does the $1 now, $2 saving of interest actually calculate?

Would love to know some facts.

[lisablay]

Hey Skella I read your post and started searching around and found this interesting blog post on mortgage payments Size Matters - the mozo blog seems that they agree with you and by just changing the frequency of your payments you can save money