Our Charlestown Branch Manager, Josh Swetnam, shares a tip that many Greater borrowers are using to save interest and repay their home loan much faster.
Since interest rates starting falling in May this year, the repayments on a $300,000 standard variable home loan taken out over 30 years with the Greater have fallen by almost $170 per month.
The reductions have been a welcome relief for borrowers with a tight family budget but those that have benefitted the most are the ones that can afford to maintain the payments they were making when interest rates were higher.
We recently surveyed a selection of our borrowers and found that 98% of them don’t reduce their payments when interest rates drop.
If you’ve got a $300,000 loan and are still making payments at the level they were in May 2012, you’re saving yourself around $140,000 in interest over the life of your loan and reducing your loan term by 6 years.
With free internet redraws you can get your hands on the extra payments any time you might need them, but if you can afford to leave the money sitting off your loan you’ll make some serious long term savings.