Through its product suite NAB it the latest major bank to reprice its home loans, recently announcing it has cut its one-year fixed rates for owner-occupiers and investors. However, NAB’s two, three and four-year Package Fixed Rate for Home Loans have increased to 3.98 per cent, 4.09 per cent, and 4.59 per cent per annum respectively.
With upwards and downwards movement it really is the perfect time for Borrowers to review their position and make sure they still have the right product for their needs.
Interest Rates Guide:
All rates are indicative and depend completely on the circumstances of the borrower. We always negotiate very hard on rates for our clients.
Weekly / Fortnightly / Monthly:
Could you be In Front by changing your repayment frequency?
Last week we covered the potential savings by switching. Keeping to the theme of saving you money another simple yet effective method is to consider your repayment frequency without putting too much strain on your finances. Most people are on monthly repayments and not surprisingly this is because it is to the benefit of the Banks.
In simple terms let’s say you pay $1,000 per month to your mortgage which equates to $12,000 per annum. If you changed this to $500 per fortnight you would actually pay back $13,000 per annum as there are 26 fortnights per year. That’s one whole extra payment when compared with your monthly repayment with no major impact to you.
But what is the real benefit to you?
Last week’s example indicated the potential to save up to $210k by switching. Using the same $550k loan the team at In Front Home Loans have crunched the numbers based on changing the frequency of your repayments.
According to our calculations, if you begin making 1/2 of your monthly mortgage payment every two weeks ($2,786.77 ÷ 2 = $1,393.38) you will pay off your mortgage 53.1 months sooner than if you just continued to make your normal monthly mortgage payments, and you will save $77,092.38 in interest in the process.
