National Mortgage Day is 24 February 2017.
It is a day dedicated to reminding people to check their mortgage and to make sure it is performing at its best.
If you are looking to save money in 2017, simply checking and reviewing your home loan can save you thousands over the life of your loan.
For example, lets say Paul and Melissa had a mortgage of $350,000 at 4.40%p.a. over 30 years. Their monthly mortgage repayment would be $1752.67 and the total interest paid over the life of the loan would be $280,962.
Sounds fairly ok right?
Well just by changing their repayments from monthly to fortnightly would have a massive impact on their overall situation.
By making fortnightly repayments, their repayment would be $877 per fortnight, and the total interest paid over the life of the loan would reduce from $280,962 to $233,929 AND they would pay their home off in 25 years and 8 months, instead of 30 years. Simply by changing their repayment from monthly to fortnightly.
Why is this so?
The reason Paul and Melissa save so much money and pay their loan off faster in the above scenario is simple. There are more fortnights in a year than months, meaning they are in effect making extra repayments over the life of their home loan without really impacting on their lifestyle.
Better still, imagine if Paul and Melissa could get a better rate on the mortgage.
Now lets say they could get a rate of 3.97% p.a. on their home loan.
This would reduce the monthly mortgage repayment to $1,665 with a total amount of interest paid over the life of the loan reduced to $249,637.
Furthermore, if they decided to pay their repayment fortnightly it would be $833 per fortnight and it would reduce the interest over the life of the loan to $210,431 as well as having the added benefit of paying off their loan in 26 years instead of 30.
This is what National Mortgage Week is all about.
It is about reminding yourself to check your home loan and make sure it is performing at its best. So you can own your property faster and get to where you want to be!
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What you need to know
Calculations contained in Paul and Melissa’s scenario are estimates provided as a guide only.
They assume interest rates do not change throughout the loan and are calculated on the rate that applies for the initial period of the loan (e.g. for fixed rate options, the repayments are for the initial fixed rate period only). Interest rates referenced are current rates. However, our interest rates are subject to change at any time.
Fees and charges are payable. The calculations do not take into account fees, charges or other amounts that may be charged to your loan (such as establishment or monthly service fees or stamp duty). If you are borrowing more than 80% of the value of the property, Lenders Mortgage Insurance or Low Deposit Premiums may apply. Any of these additional amounts will increase repayments under the loan.
The amount you could save and the time in which you could pay off your loan by making weekly or fortnightly repayments are estimates compared to repayments made monthly and assume you make the specified weekly or fortnightly repayments (which are specified as either half or one quarter of the monthly amount payable) until the loan is repaid.
Calculations are not a loan approval. Applications are subject to credit approval, satisfactory security and minimum deposit requirements. Conditions apply to all loan options. Full terms and conditions will be set out in our loan offer, if an offer is made.