Here Are Two Tips To Help You Reduce Your Mortgage Costs And By Doing So Get Closer To Owning The Entire Home You Live In.PAY FORTNIGHTLYPaying Fortnightly Instead Of Monthly Is A Very Smart And Very Simple Way To Carve A Decent Sized Hole In Your Mortgage Costs. The Mathematics Are Pretty Straight Forward; As Weall Know, A Month Is Two Fortnights, Give Or Take A Bit. But There Aren't 24 Fortnights A Year; Thereare 26. Paying Half Your Monthly Repayment Every Fortnight Means, In Effect, You Will Makean Extra Month's Repayment Each Year. You Probably Won't Even Notice.Looking At An Average Sized Mortgage Of 200,000 Over 25 Years At 7.5. The Monthly Repayment Is 1478, And The Total Interest Bill Will Be 243,400. If You Pay Half The Monthly Repaymenteach Fortnight, The Term Drops To Around 21 Years And You Save Nearly 54,515 In Interest.KEEP YOUR REPAYMENTS AS HIGH AS YOU CAN, EVEN WHEN RATES DROPWhen Floating Interest Rates Change, The Lender Will Adjust Your Monthly Repayment To Reflectthe Lower Cost Of Interest And To Ensure The Loan Term Remains The Same. If The Rate Goesdown, You Will Be Required To Pay Less On Each Repayment. If You Elect To Continue To Makethe Same Repayment When The Rate Falls, The Extra Will Be Applied Against The Outstandingprincipal Owing And You'll Save Big Time!That 200,000 Mortgage At 7.5 Will Cost 1478 Per Month To Repay Over 25 Years. Let's Assume That Five Years Into The Term, The Interest Rate Drops To 6.5. In Order To Still Have The Mortgage Repaid Over 25 Years, The Lender Will Drop The Monthly Repayment To 1369. But If You Kept The Repayment At 1478, The Term Would Drop To 18 Years And You Would Save 22,860 In Interest.
