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Extra Repayment Calculator
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Making extra repayments on your home loan could:
• Save you money by decreasing the total amount of mortgage interest you have to pay over the life of your home loan;
• Significantly reduce the length of your home loan term; and
• Get rid of your home loan and enable you to live debt-free sooner.
When you read this article you will see how even payinga small amount of $50.00 extra each monthover the term of your home loancan makea significant difference.
EXTRA REPAYMENT CALCULATOR
You can use this handy “Extra Repayments Calculator” to help you calculate how much time and money you can save by making an extra repayment on your home loan.
The “Extra Repayments Calculator” will require you to simply enter the following required fields:
• The basic information about your current home loan(i.e. loan amount, term and interest rate); and
• What extra repayment amount you would like to make.
Charles and Wendy recently bought their first home and they are now looking at making an extra repayment on their home loan of $50.00 a month.
They have a variable interest rate home loan of $450,000 to be repaid over 30 years at an interest rate of 4.59 per cent.
The total interest paid on their home loan is calculated at $379,516 making a grand total loan amount to be repaid of $829,516 (i.e. $450,000 plus $379,516).
By making a “regular” extra repayment of just $50.00 a month, Charles and Wendy have:
• Cut down their home loan term from 30 years to 28 years and 7 months; and
• Dramatically cut down their interest payments to save $19,590 in interest payments over the life of their home loan.
Which Home Loans Allow Extra Repayments?
Most home loans are generally set up as either:
• Variable interest ratehome loans;
• Fixed interest ratehome loans; or
• As a combination of both.
“Variable Interest Rate” Home Loans
This type of home loan will offer you the most flexibility where extra repayments are concerned. There are also a number of lenders/credit providers that allow you to make an unlimited number of extra repayments through the life of a home loan. You may even find the lenders/credit providers offering this as a free service of their standard variable interest rate home loans.
“Fixed Interest Rate” Home Loans
It is always advisable to talk to your lender/credit provider or to your finance broker/mortgage brokerfirst, when you are looking to make extra repaymentsas some fixed interest rate home loans will not allow you to make extra repayments without incurring an additional fee such as anEarly Repayment Adjustment (ERA) fee.
So, now you know which home loans:
• Allow you to make extra repayments; and
• Do not incur an Early Repayment Adjustment (ERA) fee.
Remember, whether you can afford to pay a little extra towards your home loan each month and, whether you make the extra payments by any of the following means you should find the financial benefits to be worthwhile:
• By regular monthly extra repayments; or
• By irregular one-off payments (i.e. whenever you have some spare money you may receive from a windfall or an inheritance).
Seek Expert and Professional Advice
If you would like further expert advice regarding your own unique circumstances and your own personal financial situation, you should talk to a professionally qualified finance broker or to a mortgage broker as they can help you estimate how much time and money you could save by making an extra repayment.
http://www.singhfinance.com.au is a reputed Australian finance brokerage firm that employs a team of professionally qualified finance brokerswho are home loan experts. For an obligation free assessment, call on0424 190 908today or visit their website and simply click on the “ENQUIRE ONLINE” form, and one of theirprofessionally qualified and expert finance brokers will contact you to make an appointment at a time and place convenient to you. They can also assess your insurance needs and advise you on a range of other finance matters.
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