I guess for me it doesn't really matter how long I take to pay off the house. I know that when my parents pass away, I'll have enough money to pay the house off in one go.
(Please do not think that I hope my parents die soon, as I prefer to have my parents and my son's grandparents, alive and kicking. I don't have any other family here than my parents and my sister who hates me.
So I really depend on my parents when I need a break once in a while. I love them to death and no money in the world would be able to replace them
I have even told my parents to give all the money to my sister as I refuse to step into a legal battle against her when they pass away. She hates me sooo much and doesn't believe I deserve 1 cent. I prefer for her to have it all as I don't need the stress and I will pay my house off one way or another. Money will not bring back my parents.)
We pay around $70 a week extra atm
We have an offset account so while we do pay the minimum monthly repayment, we try to keep as much money in the offset so that we're effectively paying off our loan quicker (but still have access to the extra cash if we need it).
We just have an offset account where we keep our savings (having the money offsets more interest then what we would earn in a high interest account).
Our loan follows the RBA decreases and increases for 3 years, then goes proper variable. At the moment it's a mix between the two.
I highly recommend loans.com.au for a home loan. They are the only company I have seen who offer the RBA guarantee without being locked in to anything.
If we did not have the offset account, we would be paying off extra to get our loan paid off ASAP. No point paying more interest then we need to!
We pay a lot extra (my hubby works away so that we can do this) but have free unlimited redraw facilities. This works really well for us. Our normal account is also an offset account to our loan.
So what is this offset account you are all talking about? Im with the Commonwealth bank.
We have two mortgages, one we pay principle and interest, the other is interest only. Both are on variable interest rates.
We pay a little more than we need to, every little bit helps! Ours is setup as an offset account, so we can access the extra money, with still having the benefits of paying extra (lower interest paid in the long term).
*I can haz typos*
Every fortnight, DHs employer pays X amount in to the offset account, when the mortgage repayments are due, they are direct debited out of the offset account and into the appropriate loan account (investment or residential). Any money left stays in the offset account and is ours to spend if we please.
It essentially means, that in the long term, you pay less interest because money in the offset account is deducted from the balance of the residential property the interest is calculated on.
At least, that's how I understand it, happy to be corrected
*I can haz typos*
Last edited by Lillynix; 08-07-2012 at 18:34.
So what about the people who do not have an employer? I have a VISA debit account with a different bank and just my mortgage account with the Commonwealth.
Commonwealth just direct debits my VISA debit account with the other bank.
Once this fixed term is finished, I'll be leaving the Commonwealth anyway, but its still 2 more years
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