and you can save another 10 years in the term
you can definitely pay off your mortgage
in just five years time
Hello everyone
Do you own a house or a property with a mortgage ?
or in other words a home loan ?
Do you want to pay off your home loan
in a very short period of time ?
Then this video is for you
Keep watching
If you are a person wanting to create
a property portfolio
or in other words a debt portfolio
don't waste your time here
Please skip and watch something else
In this video,
I am going to show you five important tips
on how to cut short your home loan Years
and how to pay off your property
in just 5 years time.
Yes it is possible
Let us go straight into the video
and welcome to Jyju's Home Videos
Number 1
Switch to Fortnightly payments
In this example,
I am using a home loan of $500,000
with an interest rate of 5%
and the term is 30 years.
By default your bank will set up
your repayment on a monthly basis.
Unless you ask them for different options
they are not going to
tell you these secrets.
In this example in which
I am going to show you now here,
see the difference in interest you can save
by switching your monthly payment
to a fortnightly payment
check the option
in switching to a weekly payment
and you are reducing your home loan by
at least five years by doing this.
I would like to tell you something about
this calculator which I am using here.
You can see that
the fortnightly payment is
just half of your monthly payment
and the weekly payment is
1/4th of your monthly payment.
If you go to any big bank's website,
you will never see this calculator.
I can show you an example.
In the second example,
fortnightly payments and weekly
payments are way cheaper than
the monthly payments.
By showing you this calculator,
these big banks want to make you think that
switching your monthly payments to
fortnightly or weekly payment options
you will not save any money.
That is their trick.
I can tell you how they are showing you
this reduced amounts here.
In this calculator,
they are multiplying the monthly
payments with 12 months
and then divided into 26 fortnightly payments
or 52 weekly payments.
If you follow this calculator,
you will not save any money,
and that's what they want.
They want you to keep paying your mortgage
for the entire term of your loan.
In the first calculator I showed you,
if you follow the fortnightly payment system,
in one year's time,
you will make 26 fortnightly payments
which is equal to 13 months payments.
That means
in one year time you are paying
an extra month's payment.
By the end of 12 years time,
you will save at least one complete year.
It will definitely save more than one year,
as you will save a lot in the interest,
since you are making extra payments here.
In this example,
you are saving at least 5 years
by switching to a fortnightly payment.
Number 2.
Make extra payments
By making extra payments,
you can cut your home loan by Years !
This is totally depending on your capacity,
to make your extra payments.
Please check with your bank,
if there is any limit or restrictions,
for you to make extra payments
as some of the home loans has
an yearly limit on extra payments
or additional fees to make extra payments
So, please check with your bank
before making any decisions.
In this calculator, I am going to show you,
how many years you can reduce by
adding different amounts
to your monthly payment.
fortnightly payment
and a weekly payment.
By making a $10 extra payment every month,
you can make a big saving in your interest.
By making an extra $100 payment every month,
you can save another 5 years.
If you make an extra payment of
$1000 every month,
see here,
how much you can save
in the interest you will pay.
and you can save another 10 years in the term.
That means,
in total you are paying off your home loan
in just 10 years time.
If you can afford to make an extra payment of
$1500 that is 1500 Dollars every month,
you will finish your home loan,
in just five years !
and what else do you want ?
As I mentioned in the beginning,
if you can afford to make these extra payments
according to your financial capabilities,
you can definitely pay off your mortgage
in just 5 years time.
Number 3
Making higher payments
or additional payments.
If you can make a higher payment
periodically,
instead of your required regular payment,
that will definitely help you to
pay off your mortgage,
quickly and in short term.
If you can afford to make
additional payments occasionally,
that would also make you
mortgage free in no time.
Number 4
Keep shopping for cheaper interest rates.
If you find something better elsewhere,
talk to your bank or lender,
to match it
or to give a cheaper alternative.
If they won't have any,
consider switching to another lender.
Keep in mind that this is a
long time consuming process.
Number 5
Consider setting up an offset account.
An offset account is a saving account
attached to your mortgage.
The account balance in your offset account
will reduce your interest payments
on your mortgage.
And this will definitely help you
to pay of your mortgage,
in a short period of time.
Another mistake at least some of us are doing,
is making interest-only payments,
which will never reduce your mortgage term.
At least for a set number of years,
you will never pay on your principal amount.
You will pay only the interest,
and the principle will stay as it is.
I hope you learned something new today.
If you follow these steps,
you will definitely finish off your home loan,
in the shortest time possible.
Whatever I mentioned here as examples,
are from my own personal opinion.
If you need a professional support or advice,
please contact your financial advisor.
We will meet again soon with
another video like this one.
Until then,
Bye bye Everyone !
you