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4 tips to save money on your mortgage

Even little changes you make now to reduce your home loan interest can have a big impact on how much you end up saving on your mortgage – and the time it takes to pay off.

Here are our money saving tips.

1. Make weekly or fortnightly repayments, instead of monthly

This is a good way to save on home loan interest with minimal effort.

Here’s the maths behind it. Interest is calculated daily and raised monthly on your due date every month. If you split your monthly repayments into two fortnightly repayments, or even four weekly repayments, you’re making repayments on your loan more frequently. This means the balance we calculate your interest on every day will be lower.

An added bonus for anyone who gets paid weekly or fortnightly is that your loan repayments can be more aligned to your pay cycle, which can help when budgeting.

Keep in mind that if you’re paying interest only on a Bankwest home loan, you can only make monthly repayments.

2. Make extra repayments

The more you pay off, the less interest we’ll charge on your home loan. Even if you make a small extra repayment to your loan every week, the savings can be huge. But don’t just take our word for it - crunch the numbers yourself on our extra repayments calculator to see how much money and time you could save by paying more off your home loan.

While our fixed rate home loans let you make extra repayments up to a set amount each year, our variable rate home loans let you make unlimited repayments to help you save more on interest and pay your loan down even faster.

 

3. Use a mortgage offset account

An offset account is a bank account that’s linked to your home loan. You can use it like any normal transaction account, but the balance in it ‘offsets’ the amount you owe on your home loan. The interest you pay on your home loan is calculated on this reduced amount. So the more you have in your offset account, the more interest you could save.

You can link an offset account to a range of our home loans. See some tips to make the most of an offset account.

4. Consider splitting your loan between fixed and variable

If you’re worried about fluctuating interest rates, you could choose to fix a portion of your home loan for an agreed term of one to five years while keeping the rest variable for extra flexibility. One great benefit of a fixed rate loan is that your repayments won’t change for the entirety of the fixed term, which can help you to budget.

Our Complete Fixed and Complete Variable Home Loan Packages let you split or switch between fixed and variable any time with no transfer fee. Keep in mind that other fees and charges, such as break fees on a fixed rate loan, may apply.

Our Home Finance Managers can help you work out if splitting your loan is the right option for you.

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Things you should know 
The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL/Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.