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  1. #1
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    Default Do you pay extra on your mortgage?

    At our locked in rate we currently owe $1200 a month exactly on our mortgage. Instead we pay $1360 a month. Does that little bit extra help or should I be putting more onto it? Trying to decide how much to pay on mortgage verses how much to put aside for renos. As we are locked in we can not access the extra money on our mortgage (which would be approx $4,000 at current) but we can defer our mortgage payments while we are in front.

  2. #2
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    We pay a small amount extra (I wish it were more!) and yes, every little bit helps, especially at the beginning of your mortgage. There are extra repayment calculators online which show you how much $$$ you save and how many months/years you take off your loan by doing so.

    If you can't access your additional payments, can you open a high interest savings account and put the extra money in there?

    If it were me, I would probably split the difference and put half in the mortgage and half in the savings account.

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  4. #3
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    Def every bit helps! Keep doing this and you can save yrs off your mortgage

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    We pay $420 a week and our minimum is actually $378 or something like that.

    Our Internet banking has a section that shows how long is left on our mortgage. Our loan has another 27 years but by paying the extra each week it cuts it down to 19 years and 7 months, so definitely worth it..

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    We're required to pay $1,800 a month but we pay $2,400.
    It lowers your interest quite a bit.

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    Paying extra on your mortgage definitely helps.....also paying repayments more frequently helps too (weekly payments as opposed to monthly).

    I'm assuming that you aren't able to access your extra payments as you are in a fixed rate loan for a length of time?

    An option in future would be to consider splitting your home loan between fixed and variable loan....that way you put all extra repayments into variable loan and can still redraw extra payments in future, but in the meantime you are getting advantage of interest saving.

    Disadvantage of having one loan account where you can't access funds is that you will need to save for renos using a savings account and the interest earned in that account will be much lower than interest rate saving which you would otherwise get from money being in your home loan....the interest from savings account may also be taxed too.

    Sent from my GT-I9000 using BubHub

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  10. #7
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    The split loan sounds like a good option, thanks. Wonder if our bank "which bank?" offers them

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    Most banks do but if your whole loan is fixed you'll have to wait for the end of the fixed period to refinance or pay huge fees - with fixed loans the back bargains on getting your payments over a certain period of time.

    We have our loan all variable and we always pay a little extra - it's not much but it all helps.

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    I was going half fixed and half variable, but witnessing what this did with my ex's situation, I decided against it.
    I prefer fixed all he way as it helps me with setting up my monthly budgets. I make up a budget on every first day of each month and knowing what I'll be paying on mortgage in advance, helps a lot in my case.
    With variable you can never be too sure.

    In saying this, my mortgage is $542 per fortnight and that is all I pay until I hit the jackpot or my income suddenly goes up (yeah right!).

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    I used to work for a large bank and you can normally open an offset account linked to your home loan to offset the interest but still be able to redraw if you have a fixed loan. Maybe contact your bank ask if thats an option :-)

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