What if you kept your home loan repayment higher than the minimum payments. As interest rates drop sometimes there is an opportunity for payments above the minimum.
How much quicker could you become mortgage free by keeping repayments at a higher level? Lets look at an example of a home loan of $750,000 @ 2.5%.
If you paid an extra $143 per week (the extra that would apply if the rate was 4%) the term would drop by seven years.
Should you lock in a higher payment?
No – you can use products such as, revolving, offset or floating to retain control of the extra payments. You need to keep the additional repayments flexible to ensure you are safe during any unforeseen cashflow constraints.
