FOUR WAYS TO REDUCE YOUR MORTGAGE FASTER

Paying your mortgage down fast is easier if you use tried and tested strategies, says BNZ mobile mortgage manager Shilane Shirkey. Here are her top tips:

1 Increase your repayments by rounding up

If, for example, you had a $800,000 loan over 30 years and your minimum repayment was $901.10 per week, rounding up the repayment to $910 would result in savings of around $22,000 and the mortgage being paid nine months ahead of schedule.

2 Make weekly repayments

More frequent payments will reduce the amount of interest charged and can save you a lot in the long run. For example, weekly repayments on a $660,000 loan could save you around $188,000 (compared to fortnightly payments with zero savings).

3 Split your loan

If you split your loan into different types, such as table and tailored, you can work on paying off one first. For example, a $500,000 loan paid off this way in 15 years could result in savings of about $278,000. Some loans, like BNZ’s tailored loan, have annually increasing repayments, to pay it off faster. When one loan is paid off, move onto the other.

4 Offset your payments

A TotalMoney account offsets the money in your everyday accounts from your mortgage before the interest is calculated, which means you’re only paying interest on the difference. This can save you a lot on interest and also reduce the length of your loan.