Nearly 90% of Australians go beyond the minimum to reduce their home loan as quick as possible, new survey shows
Urgency among Aussies to pay off mortgage sooner
New research from finder.com.au shows there is an overwhelming sense of urgency among Australians to reduce their mortgage as fast as they can.
Almost 9 out of 10 mortgage holders (89%) aim to get out of debt sooner with the survey showing 60% of homeowners make extra loan repayments.
The results also revealed women (90%) are marginally more likely than men (88%) to attempt to pay off their home loans faster, while Baby Boomers (18%) are twice as likely as Generation X (9%) to have never tried paying off their mortgage faster.
40% of borrowers opted for more frequent payments either fortnightly or weekly, instead of monthly.
When it came to how borrowers fast-track their home loan repayments, 34% opted for using a linked offset account.
Finder.com.au money expert Bessie Hassan, said borrowers wanted to break free from the burden of a 30 year mortgage sooner.
“Some borrowers feel burdened by the thought that they could be paying off their mortgage in twenty or thirty years time if they only pay back the minimum each month – so they're actively looking for ways to lower their balances,” she said.
“Fast-tracking your mortgage repayments could save you thousands of dollars in interest over the life of a loan, and a good way to do this is to make more frequent periodic repayments.
“If you had a $367,600 mortgage (the average national loan size) at 4.73% interest (the average standard variable rate) your monthly repayments would be $1,913.15 and total cost of the loan would be $688,732.79. However, if you switched to fortnightly repayments of $956.57, you would save $56,654.18 in interest and you would reduce your loan term by four years and seven months, as you end up making one additional repayment each year.
“However, it needs to become a habit not just a once off contribution, as consistency is key,” she said.
New research from finder.com.au shows there is an overwhelming sense of urgency among Australians to reduce their mortgage as fast as they can.
Almost 9 out of 10 mortgage holders (89%) aim to get out of debt sooner with the survey showing 60% of homeowners make extra loan repayments.
The results also revealed women (90%) are marginally more likely than men (88%) to attempt to pay off their home loans faster, while Baby Boomers (18%) are twice as likely as Generation X (9%) to have never tried paying off their mortgage faster.
40% of borrowers opted for more frequent payments either fortnightly or weekly, instead of monthly.
When it came to how borrowers fast-track their home loan repayments, 34% opted for using a linked offset account.
Finder.com.au money expert Bessie Hassan, said borrowers wanted to break free from the burden of a 30 year mortgage sooner.
“Some borrowers feel burdened by the thought that they could be paying off their mortgage in twenty or thirty years time if they only pay back the minimum each month – so they're actively looking for ways to lower their balances,” she said.
“Fast-tracking your mortgage repayments could save you thousands of dollars in interest over the life of a loan, and a good way to do this is to make more frequent periodic repayments.
“If you had a $367,600 mortgage (the average national loan size) at 4.73% interest (the average standard variable rate) your monthly repayments would be $1,913.15 and total cost of the loan would be $688,732.79. However, if you switched to fortnightly repayments of $956.57, you would save $56,654.18 in interest and you would reduce your loan term by four years and seven months, as you end up making one additional repayment each year.
“However, it needs to become a habit not just a once off contribution, as consistency is key,” she said.
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In your first 2 years of broking? Aged under 35? Get featured in MPA magazine and online as one of our 2017 Young Guns. Take 2 minutes to apply now and start your rise in broking; applications close December 2nd.
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