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If I was 25 again I would... pay extra off my mortgage!

Updated: Jul 4, 2023

Buying your first home is an exciting and significant milestone in a person’s life. However, this joy can be shattered all too quickly when we face the reality that our mortgage repayments come knocking on our door more than we would like it to. However, with the right planning and strategy, you can have your mortgage paid off sooner than you’d think.

For example, if you can find just $100 extra per month to add to your mortgage repayments – which is less than the proverbial cup of coffee every day, for a $300,000 mortgage with an interest rate of 3.75% per annum over a term of 25 years, you would save $17,466 in interest! Not to mention you would be able to shave more than two years off the term of your loan.

Alternatively, if you can’t make the extra repayments regularly, you can aim to use any windfalls to pay down the loan. An additional $1,000 paid at the beginning of the same mortgage could save you $19,795 in interest over the term!

Practically speaking, the easy way to do this is through a mortgage offset account. This will ensure all your savings, including the extra amounts you find here and there, are working to reduce your total interest bill. And if interest rates rise, the savings will be magnified.

Paying off your mortgage can appear to be a mountain of a task that you might spend a good portion of your life trying to pay off. However, by having one of our financial advisers by your side to keep you on track and help you manage your finances, your income and expenditure, your journey to pay off your mortgage will be much easier with them than without them.

Aspiram Pty Ltd T/A Aspiram Financial Planning are Authorised Representatives of RI Advice Group Pty Ltd, AFSL 238429 an Australian Financial Services Licensee. Any advice or information in this publication is of a general nature only and has not taken into account your personal objectives, financial situation and needs. Because of that, before acting on the advice, you should consider its appropriateness to you, having regard to your personal objectives, financial situation and needs


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