Now is the best time to make extra repayments into your mortgage or keep repayments high. Every extra dollar repaid comes off the loan principal, which means it's a dollar on which you'll never again pay interest.
With rates expected to begin to start rising again, even small overpayments could save you tens of thousands of dollars in the long term.
The average borrower with a $220,000 25 year mortgage will pay about $300,000 in interest to their bank over the life of the loan at rates of 8%. At the current home loan interest rates of around 5% that same borrower would pay their bank about $166,000, over 25 years.
Currently the average borrower is about $600 per month better off because of the drop in rates. Putting that $600 into the mortgage will save another $69,000 over the life of the loan.
Posts
