If you have unlimited additional repayment you can pay extra on your mortgage without being penalised. You can make additional repayments of any amount every time you make a repayment. However, this is only applicable if you’re on a variable interest rate.
As an example, imagine your home loan amount is $350,000 at 3.64% interest. Your minimum monthly repayment is $1,599.14. The total amount you will pay in interest is $225,689 over 30 years. If you decide to add $150 on top of the minimum repayment, you will only pay a total of $189,316 in interest. That’s a saving of $36,373, plus you pay off your loan five years earlier.
You can use our additional repayment calculator to get an estimate of how much you can save from making extra repayments. This calculator is very easy to use. You just need to input your loan amount, loan term, payment frequency, and the amount of your additional repayment.
There are many benefits when you decide to make regular extra repayments. Even a small amount can make a huge difference in the long run. Here are the top three advantages of home loans with unlimited additional repayments:
You can save on interest: The more money you owe, the more interest you’ll pay. If you make extra mortgage repayments on a regular basis, you are lessening the principal amount you owe which will lessen the interest payable over the term of your loan.
You can redraw the money: If you have an offset sub-account, you can redraw the extra repayments you made when you need the money.
Make sure to check out our home loan products so you can enjoy the benefits of unlimited additional repayments on your mortgage.
Tags: additional repayments | home loan | mortgage payments