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How to pay off your mortgage faster?

When was the last time you looked closely at your loan balance, the progress you are making on paying it off and how it compares to others in the market? Analysing your mortgage could mean savings for you, as well as the opportunity to pay it off more quickly, invest in other assets or reach financial freedom sooner.

Make smaller and often repayments To cut the size of your payments, make more often. That could even see you pay off your loan after and therefore pay less interest overall.

If you pay your mortgage monthly, consider changing to fortnightly repayments. As well as having more manageable payment to make, by the end of the year, you will have paid off $31,200 rather than $28,800.

Pay just a little bit extra Most loans need at least minimum repayment, but that doesn't mean you can't pay more, whether here and there or regularly.

By contributing an extra $100 or even just $10, you will see significantly reduce your mortgage. It may also be worth to consider putting all your bonuses, tax returns and gifts into your mortgage.

Don't decrease repayments when interest rates fall Even if your repayments have lowered when fees and interest rates decrease, it doesn't mean that you have to keep your repayments at the same level when the interest rate is lower, you can consider to pay more of the principal with each payment and make rapid progress on your loan.

Offset it If you can, try to use an offset account. A mortgage offset account is a savings account that linked to your loan and the interest payable on the loan from month to month will be calculated by deducting what is in your offset account from your current loan. For example, if your mortgage is $500,000 and your offset account has $10,000 in it, you will only pay interest on the remaining $490,000.

An offset account will save interest while still giving you access to your savings. It also means investors can preserve the tax deductibility of the mortgage.

Find a better deal Ultimately, your mortgage needs to suit you and your circumstances, or you will wind up paying too much. If you think your current loan no longer matches your situation, speak to your finance broker. They will be able to find the right product for you as well as negotiating appropriate rates on it.

Of course, it is important to make sure that your lender doesn't charge fees for extra repayments, refinancing or any other steps you take in an attempt to save your loan. YOur fiance broker will be able to provide details and make sure you have a mortgage that lets you pay down your balance sooner.

Please come speak to Kevin Poh on 0415820016. He has the expertise to make sure you aren't paying too much and are in a loan that suits you.

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