Home ownership is one of the average Australian family’s goals but owning your home is not set and forget.
In fact in the same way you should review regularly review your superannuation and your insurances to ensure that your strategy meets your goals and objectives, a regular review of your home loan can be an integral part of your wealth creation. Given that the RBA (The Reserve Bank of Australia) has dropped the cash rate to 1% this year in a move to boost the economy have you reviewed whether your bank has passed on this rate cut to you? The rate of interest that your home loan is charging can make a great difference to how much and how long it takes to repay your home loan.
For example; If you have a loan of $500,000 to pay the loan off at 4.5% it will take you 25 years and 1 month to repay it. You will have paid $336,270 in interest. Whereas if the same loan is repaid at 3% interest you will repay the loan in 20 years and will have paid $166,976 in interest. (See detailed graph below)
This is a savings of $169,294 in interest and 5 years! Would you rather pay off your home loan sooner and pay less interest? Check out https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/mortgage-calculator#!how-can-i-repay-my-loan-sooner to run your number, or contact us on 07 3211 8600 to discuss further.