- Pay off as much as you can as early as you can. By making lump payments and keeping regular payments as high as possible early on will help reduce the amount of interest you pay by paying the principle off sooner.
- Make an annual lump sum payment. Use your tax refund or windfall such as a work bonus to pay off your loan. Make sure your loan allows lump sum payments. Some fixed interest loans don’t so when you are setting up the loan, make sure to account for this.
- If interest rates go down, keep your payments the same. This way you will be paying a larger portion of the principle off each month and therefore shorten the life of the loan.
- Try ‘saving’ to the mortgage account rather than a separate savings account. The interest you save will be great than the interest gained in any savings account.
- Cut out one small luxury a week. A few dollars saved on coffees each week can add up to hundreds over the year and potentially save you thousands in interest costs.
March 23, 2015