September 24, 2018

Home Loans

Saving Money on a Home Loan

Home – where foundations are set, families are built, stories begin and memories live on. It’s what many of us dream of – a comfortable place to call our own.

Sentimentality aside, a home is also probably THE MOST EXPENSIVE THING YOU’LL EVER BUY. At a median value of around $550,000, dwellings in Australia require a fair chunk of dough to be cooked up by the everyday punter. Unless you’re flooded with cash, most of this will need to be borrowed through a home loan (otherwise referred to as a mortgage).

Repaying this home loan can feel like ‘forced savings’, with money put towards the home as ‘equity’ to solidify it as the bedrock of your household’s finances. In that sense, paying off your property – an asset which can grow in value – could be seen as an ‘investment’ rather than a ‘cost’. But a scoop of your repayments are fed to the lender in interest. Over the life of the loan, this interest can knock you for six in cost figures.

For example, a $400,000 home loan at a 4% interest rate over 25 years could set you back over $200,000 in interest. See for yourself with our mortgage repayment calculator.

So as your biggest expense, your home loan should be one of the first places to hunt for savings.

At Savings.com.au, our practical savings advice can help you here – be it by helping you pick a good value home loan to help you purchase a house or unit, or by guiding you toward opportunities to save on your current home loan through different options to refinance.

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