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5 Tips for lowering your monthly mortgage payments

By Al Twitty | December 13, 2016

Acquiring a mortgage is undoubtedly one of the biggest financial decisions you’ll ever have to make in your lifetime, therefore finding the home loan that fits your needs should be your primary concern. Consider these 5 tips to lower your monthly mortgage payments, which can allow you to save thousands over the course of your loan.

Check your home loan’s health. The first step in lowering your mortgage repayment is to see whether you’re paying more than you should be. This is called a home loan health check, which lets you determine whether there are better loan deals out there. You may do this once every couple of years. More often than not, there’s interest rate that’s better than what you’re currently paying.
Consolidate your debt. To reduce repayments, consider using your home loan to assist you with paying less on other types of debt you may have, like a personal vacation or car loan. If you’ve built up enough equity in your home, you may have the option to consolidate the other debts you have, such as credit cards, into your home loan. Instead of paying the usual higher interest on those debts, you can take advantage of the typically lower home loan interest rate and save on overall interest.

Consider refinancing your loan. Because your home’s value can change over time, the interest on it is bound to increase as well. Don’t be complacent and seek a better deal to refinance your loan, because chances are, there are better options available. You don’t have to do this alone because a mortgage broker can easily help you find a better deal. He or she will work to identify better interest rate in the marketplace, with better terms and fees. In Australia, you just need a driver’s license and they can take care of the rest.

Assess your insurance deal. If you paid less than 20 percent deposit, you may have been sold private mortgage insurance, which costs thousands on top of your mortgage annually. After paying off 20 percent of the mortgage, you can drop the PMI. The lenders won’t tell you thin, so you’ll have to ask them to cancel the insurance.

Try overpaying on your mortgage repayments whenever possible. You can get your mortgage down by simply paying more than your scheduled monthly payments by as much as possible. By paying off more of your mortgage, you’ll be in a better position when interest rates rise, and the monthly payments start to hurt. Check with your lender first that there aren’t any penalties if you overpay. Ensure that there aren’t any other expensive credit cards or loans that need dealing with first.

Switch to a more affordable mortgage provider. Check to see if your lender is offering the cheapest rate. You may have to pay administration fees or early redemption penalties to your existing lender, but you can save a lot by switching to the best variable rate home loans or other kind of loan from other providers. There are hundreds of deals out there which change all the time, so be a smart homeowner and check them out.

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