Refinancing

How your mortgage and mortgage repayments are structured strongly influences how rapidly you can repay your loan. Your Lending Manager can advise you on the best ways to minimise your mortgage, reduce the term of your loan and own your home sooner. By opting for mortgage minimisation facilities such as redraw or offset accounts, you essentially put every dollar you earn to work against your debt. Instead of having numerous accounts, you pay all your salary and savings into the loan account or an offset account. You still can access these funds like a normal savings account (via EFTPOS, cheque, phone or internet banking). However, the longer you leave additional funds in the account, the greater the interest ‘offset’ benefit. Over the life of the loan, this can equate to quite substantial savings, more noticeable as your loan balance reduces.

You may also link your loan or offset account to a credit card facility. This allows you to live off the card and pay the balance on the last day of the interest-free period. Therefore you utilise an Interest-free period on your credit card while your own money assists in reducing the Interest charged on your home loan account. By making your loan repayments more frequently, i.e. weekly or fortnightly instead of monthly, you’ll notice further savings. Interest on mortgages accrues daily, so repaying weekly or fortnightly will save you more Interest than repaying monthly. While this concept of mortgage minimisation may sound complex at first, much of the process can be automated, making it very easy and worthwhile. The process also helps you work within a budget.

Internet banking facilities are also available from most lenders, giving you total control of your funds. The first step to financial freedom is to be in control of your lifestyle. Filling out the budget and sticking to it will help you set and achieve realistic goals for future savings

Asking your existing lender for a rate review or looking at other lender options is another way of mortgage minimisation.

The Innovative Home Loans team can guide you on all available options to reduce your repayments!