Cave Financial Services

Pay off your mortgage quicker!

Thu Aug. 8th 2019

New Zealand home loan rates are at record lows, and with the OCR being slashed to 1%, it's likely we will see them drop even further.

If you have already taken steps to benefit from the low rates being offered by lenders, great - but don't be tempted to just make the new minimum repayments and spend that spare cash elsewhere. Now is a great time to make headway in reducing your mortgage. Here's how:

1) Speak to us about how we can negotiate a new rate for you - as a Broker we can usually secure even lower rates than those that are being advertised by the banks.

2) Once you have secured a new lower rate, keep your repayments the same as they were. The extra that you pay will go towards paying the mortgage down quicker. Keeping your repayments the same now also means you won't notice as much if, and when, rates go back up in the future and your repayments creep back up as a result.

3) Make repayments fortnightly rather than monthly - there are 26 fortnights a year, which equates to 13 months. You'll end up paying an extra month off your mortgage without realising.

4) Round-up repayments - if your repayment is $1278 round it up to $1300. You won't notice the extra $22 but over time it will make a big difference to reducing your mortgage balance.

5) Look outside the big banks - as a broker we have access to the entire mortgage market, and it may be that the lesser known banks are offering even lower rates than the big 5.

Whilst now is the perfect time to be making overpayments on your mortgage, be mindful that some lenders have a limit on how much extra you can repay. If you have already, or are interested in, appointing us as your broker, we would be able to calculate this for you and advise how much extra you can repay without being penalised. We also negotiate with the banks to secure new rates for you - some lenders are even offering cashback incentives. Better still, our service comes at no cost to you as we are remunerated by the banks!

Contact us to discuss paying off your mortgage quicker.

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"Michael has a wealth of information to share with regards to financial planning...he has always provided valuable information to both my clients and me without being a pushy sales person! "
Vijay Nyayapati

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