It is everyone’s dream to own a house. But financing the house payment can be difficult as there is no readily available payment until or unless there is a home loan on one’s hand. There are different types of home loans available. These include introductory standard variable rate home loans, basic variable rate home loans, fixed-rate, split rate & interest only. But taking loans is easier, but to repay it can be a difficult task. One must know what loan suits them and how will they finance it over time. We know everyone is looking for ways to save money on home loan repayments, and we will guide you on how to do so!
Saving Money on Introductory Home Loan:
An introductory home loan initially provides a lower interest rate, but it increases with time. The lower interest can last up to 1-2 years. Borrowers can use this opportunity to their advantage and pay the principal amount to reduce their future payments. It is to be understood that the interest rate will change after the introductory period, so it is better to cover the major chunk of their repayment.
Saving Money on Basic Variable Rate Home Loan:
The basic variable rate is elementary and easy to interpret. New buyers or buyers with a restricted budget usually go for it because of its lower payments. It has a variable rate of interest without any other fees. Borrowers make it clear before taking the loan whether they want principal and interest or interest only. Typically, its repayments are much lower than other home loans. The repayment also goes down if the interest rate is lowered due to the variable rate. It also allows you to make extra payments to cover up your loan quickly. The flow of flexible payments makes it easier for the borrower to pay as per their ease.
Saving Money on Standard Variable Rate Home Loan
Australians have made it clear that it is their favorite type of loan with its flexibility and simplicity. It has a lesser fee and allows lump-sum repayments, it has the lowest interest rates, and this loan allows unlimited extra repayments. This allows us to bring down the loan amount sooner. While you’re paying extra to cover up your loan, you can also attach an offset account to offset the borrowed interest amount. It is beneficial because the home loan is higher than the interest saved in the offset account. Standard Variable Loan can save a lot of money as the interest lowers, allowing your repayments to decrease.
There are many other loans as well, but saving money on them can be a difficult task. For example, in fixed-rate home loans, a certain amount of interest is paid until the complete repayments. And the rest loans also have some certainties that have to be maintained, and they lack the feature of allowing us to save money. You can read the customer reviews on the internet as well to get better insight about the loans.