It’s no secret that paying off your home loan sooner can save you plenty. However, with cost-of-living pressures and rising interest rates, it can be hard to find extra cash.
A series of small changes applied consistently over time could put you on track to reach your goal sooner. Here are 8 tips to help boost your savings.
Tip 1: Make a plan you can stick to
Rather than making extreme changes to your lifestyle and spending habits, focus on a range of savings strategies that will be sustainable. Consider cancelling those streaming subscriptions you’re not using, learn how to cook your favourite meals at home, or opt for a second-hand or DIY option rather than buying brand new.
Tip 2: Automate and separate
By automating your savings and extra mortgage repayments, you move the money to where it needs to go before you have a lapse in willpower and spend it. Transferring your savings to an offset account may also help you save on interest charges.
Tip 3: Get a home loan health check
Reviewing the terms of your home loan every two years may help you find ways to save on fees or loan features you don’t need. We can carry out a loan health check for you and help you weigh up your options.
Tip 4: Create a budget and check your progress regularly
Tracking what you actually spend is the only way to get an accurate picture of your finances. Create a spreadsheet or use a budgeting app such as Mint, YNAB or PocketGuard to categorise your spending and identify where you can cut back to meet your savings goal. Keep an eye on your progress each week to stay motivated and reinforce good habits.
Tip 5: Find extra income streams
Realistically, there is only so much you can save. Another way to boost your savings and make extra repayments is to establish an additional income stream. This could be a side hustle to your 9 to 5, taking advantage of unused assets or selling some of the unused things sitting around the house.
Tip 6: Swap this for that
There are so many ways to trim the fat without feeling like a scrooge. Swap out an expensive hobby for a cheaper or free one, use cash instead of cards to reconnect with the reality of parting with your hard-earned money or skip a day at the spa for treatments you can do at home.
Tip 7: Make lump sum payments
Rather than spending your tax return or annual bonus, opt to make an extra repayment on your mortgage. Instant gratification is tempting, but remind yourself that additional lump sum payments can affect your total home loan repayments and the length of time it will take to own your property outright.
Tip 8: Consider paying your mortgage weekly
It may not seem like it would make much of a difference, but changing your mortgage repayments from monthly to weekly may have a positive impact over time. Because your interest accrues daily, this simple switch could potentially save on your home loan.
Ready to kickstart your savings plan and boost your mortgage repayments? Contact us for professional advice about saving on your mortgage.