The system I use:
I have a home loan with an offset account that my regular income goes into. The day after I receive my regular monthly income, I have a certain amount that automatically goes across to the home loan account – out of sight out of mind so to speak.
The minimum monthly mortgage repayment comes out at a different time during the month. But I’ve learnt that by getting the extra amount taken out as soon as I get paid, the remaining amount in my account is there for me to live off for the rest of the month.
It is important to ensure you know what your monthly spending is and you have enough to live off. There is no point moving a large sum of money over to your home loan and then having to move it back again because you weren’t realistic about what how much you spend. Plus you will only feel deflated and like you’re not making progress.
The greatest benefit I’ve found about this system is I don’t have to think about it. It happens automatically, yet it can save you thousands over the long run.
To setup the your automatic transfer simply:
* Setup a regular transfer from your everyday account to your home loan
* Ensure it is setup for the day after your paid and matches the frequency that your paid
* Make the regular amount realistic (10% of your income might be a good place to start)
* Review your progress after 12 months
Current leading interest rates
Leading variable rate 3.79%
1 year fixed rate 3.69%
2 year fixed rate 3.69%
3 year fixed rate 3.79%
5 year fixed rate 4.19%
If you have any finance questions you would like to discuss, feel free to reach me on 0434 514 533