latest blog articles

HOME > BLOG > Latest Blog Articles > A home without a mortgage? Tell me how!

There’s no need to spend a lifetime paying off your mortgage. Some smart steps could be all that stands between you and paying off your debt faster. Are you ready to take control of your mortgage and bring that mortgage-free day closer? Read on for inspiration and some simple steps.

Give yourself flexibility

  • If you’re want to take a firm hold of your mortgage, definitely consider the benefits of ‘splitting’ your mortgage between fixed and variable rates. Having part of your mortgage on a variable rate and part on a fixed rate, increases your options – such as those outlined below - to pay it off faster without incurring fees.

More is more than you’d think

  • Increase your repayments: Sounds obvious and it is. But you might be surprised by just how big a difference a small increase to your repayments can make over time. The cumulative effect of even $100 a month can make an impressive difference to how much time it takes to pay off your mortgage, not to mention how much you could save in interest costs. For example, on a $500,000 loan at 5.19%, if you paid an extra $100 per month you would save over $45,000 and 2 years and 4 months off the life of your mortgage*.

    So, if you think there’s some room in the household budget to give your repayments a boost, get out the calculator and start planning. And one last thing – the sooner you start, the bigger the positive impact. No time like the present as they say.

Up the frequency

  • Paying bills monthly is common – and not just for the mortgage. But did you know that if you took your monthly mortgage payment, halved it and paid fortnightly, then because there are actually slightly more than two fortnights per month, within 12 months you would have paid the equivalent of an additional monthly repayment. Depending on how your personal finances are structured, paying fortnightly can be a great way to spread the impact of an extra payment across the year.

Lump it on

  • Had a bonus from work? A tax refund? Or do you have some savings that (in part or full) could be working harder for you on the mortgage than in the savings account? If you do have cash and you decide that it could do more for you on your mortgage, get ready to make a lump sum payment. As with increasing your regular repayment amounts, one-off lump-sum payments can have an impressive impact on the bottom line of your mortgage. And again, the sooner you start, the more time and money you’ll save over time – it’s the cumulative effect of extra cash on the mortgage.

Get serious with Line of Credit

  • If you’re really motivated to say goodbye to your mortgage in as little time as possible, a Line of Credit could be right for you. In a nutshell, a Line of Credit gives you the ability to pay all of your salary onto your mortgage, and therefore significantly reduce the total principal that you are charged interest on. Depending how much you withdraw for your total monthly expenses and when, your mortgage balance will benefit from the maximum amount of cash you can afford each month.

    It’s certainly not for the undisciplined, but using a Line of Credit for your home loan can be incredibly effective in paying off your mortgage faster.

Keep it top-of-mind

  • Remember not to put the mortgage documents in the bottom draw and forget about them. Set yourself a regular task to have a look at your mortgage and whether any opportunities exist to pay it off faster. Sometimes simply sitting down with the numbers can highlight a bit extra cash here and there that could do a better job for you on the mortgage.

Golden rule: it doesn’t have to huge amount to have an impressive cumulative effect. If you get into the habit of looking for extra for the mortgage on a regular basis, you could be very surprised as to how soon that mortgage-free day arrives.

Looking for a lender who’ll work with you to pay off the mortgage faster? Talk to one of our Lending Specialists at RESIMAC Direct. We’re expert at helping Kiwis understand their options. Remember, you don’t have to spend a lifetime paying off your mortgage.

*Source: RESIMAC Direct Mortgage Repayments Calculator

  • Use a calculator to get an estimate of how much you can borrow.
    Try one here

  • See if you qualify. To get a more accurate idea of how much you can borrow with RESIMAC Direct,
    click here

  • Call our Lending Specialists and they can do the calculation for you over the phone plus answer any questions you have at the time. Talk to us on 0800 466 656