3 ways to save money on your home loan

With the cost of living and mortgage rates continuing to rise, many homeowners are looking at the different ways they can save some money. Fortunately, if you already have a home loan, there are some options that might be able to help.

Consolidate debts

If you have a number of high-interest debts, it might be worth trying to consolidate them. When you consolidate debts, you are effectively rolling your higher-interest debts like credit cards and personal loans into a different loan with a lower interest rate. A good way to do this is to refinance your home loan and take out one loan that could cover all of your debts in one go. This way, you’ll be saving money on interest, which you could then use to pay down your home loan faster.

Lower interest rates

With banks raising their interest rates and lower fixed-rate loans starting to roll off, it could be a good time to try and find a better deal on your home loan. Many lenders will offer competitive interest rates to new customers as well as other incentives that could save you money. By comparing your home loan options, you might be able to save money on interest payments.

Better loan features

These days there are several features that come with home loan products that can really help save money. One of the best is an offset account. An offset account is a lot like a transaction account, however, all the funds that you keep in the account help save on interest. It works because the interest payable is calculated off your home loan balance, less the funds contained in the offset account. An offset account allows you to keep any additional money in the account so you can access it if you need it – all the while saving you money on interest payments. It’s similar to having a redraw feature on your home loan. It’s even possible to save more money with the help of an offset account by paying monthly expenses with a credit card and putting the saved money into your offset account. Then at the end of the month, you simply pay off the credit balance while still saving the interest on your home loan.