26 Aug 2021

A home loan is one of the few things in life that is thrilling to secure, yet we all strive to be rid of as soon as we have it. Winning the lottery is not always going to be a successful strategy to becoming mortgage- free so instead it’s probably best to have a few moves in your financial playbook on hand to get ahead and be free of your home loan shackles.

Here are a few home loan hacks you need to know

Use a Mortgage Broker

Even if your loan was not set up originally by a mortgage broker, that doesn’t mean you are tied to your lender for life. It’s imperative that you check in with your broker regularly (or seek one out of you don’t have one) to ensure your rate is still competitive and your products suit your needs.

A mortgage broker will be able to advocate on your behalf to secure additional interest rate discounts with your bank or potentially find more cost-effective options, be it with your current bank or another. Make sure you use this service at least once a year.

Pay More

Sounds ridiculously simple, but really that’s the long and the short of it. But perhaps figure out a strategy that works for you. Some effective options are:

Increase your minimum repayment – Increase your repayment amount to have more come out that will directly come off your loan balance. A quick call to your bank can get this done.

Salary Sacrifice – Check with your employer if salary sacrificing into your mortgage is an option. This benefit is normally available to hospital workers or those employed in a non-government organisation or a not-for-profit organisation such as a charity.

Use your offset account – If you have an offset account sitting in your financial toolbelt then it is wise to utilize it to the best of its ability. Ensure your salary is paid into this account and try and keep as much in there for as long as possible by making your daily payments on your credit card. However, be mindful of the fact that the card needs to be cleared at the end of the month before interest is accrued.

Or why not investigate to see if your lender is one that offers multiple offsets? This is great is you prefer to compartmentalize your money into different account for different reasons.

Reduce your loan repayment term – Do you have a goal to pay off your loan say, five years earlier that the contracted term? Simple! See if you can have your loan term reduced so it automatically happens. This is a real “set and forget” method to chip away at the principal effectively.

Refinance your Mortgage to a Cheaper Rate

Financially savvy mortgage holders always check in with their mortgage broker at least every year to ensure they have a rate and product that is still in alignment with their needs. This may involve looking at alternate lending options to secure a cheaper and more cost-effective rate.

Refinancing to a different lender is easier when you have a mortgage broker acting on your behalf as your unbiased advocate. Not looking at what other lenders are offering on a semi-regular basis is doing a disservice to both you and your finances and could be costing you money.

No one  loves paying their home loan but it is not going to pay itself off quicker, it needs help. Engaging any or all the strategies above will help you be debt free sooner with a little perseverance. But your first port of call should always be your mortgage broker to help figure out what will work best for you. Call one of our friendly experts and start saving.

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