Want to Save Money?

With interest rates falling now is a great time to take advantage of the opportunity to save a great deal of money. Contact me by email or on 027 2511 336 if you would like to find out more information on your particular situation. Say you had a $300,000 home loan on a 25 year term and the interest rate had just fallen from 7.75% to 5.95%. Rather than reduce your loan payments by $342 per month leave the payments the same and you would save a whooping $87,642 in interest. Use your own figures and like most, you will be amazed at how much you can save by not reducing your payments. Likewise, look at increasing your payments as often as you can. I recommend each year you should try and increase your payments a little or at least don’t reduce the payments if rates come down. Naturally if the budget is tight you can but when things do ease for you don’t forget what a small increase can save you and as it is debt reduction your savings isn't taxed. For your convenience I have copied this calculator from our calculator page to make it easier for you to experiment a little. What are my repayments at the old & new interest rates? Term: years Rate: percent Loan Amount: dollars         Monthly Repayments: principal and interest Click here to open another window with details on the current interest rates available. Fill out the details below using the new interest rate and put the difference between the two payment amounts you worked out above in the extra repayment area.  Loan amount: dollars Term: years Rate: percent Repayment frequency: WeeklyFortnightlyMonthly Extra repayment amount: dollars Extra repayment frequency: WeeklyFortnightlyMonthly                   Interest saving: dollars New term: This can be a real eye-opener and something not many people are of aware of. I recommend you look at doing this exercise each year. I can help you work out what your budget surplus is and increase your payments by 80% of that amount. The reason I say 80% is that if you commit your full surplus, you have nothing to fall back on should the unforeseen happen – and it does, we unfortunately don’t live in a perfect world and when these things happen, it is unlikely you will increase your payments again in a hurry as last time it caused you stress. With regards to payment frequency as a means to save, check out my article titled The Great Fortnightly Myth or contact me by email or on 027 2511 336 if you would like to find out more information on your particular situation  .