RumpledElf

Paying the mortgage faster

10 posts in this topic

Well, we've just hit the anniversary of having our current home loan, which means soon we've had the house for a year. Time flies! And we have one of 'those' loans, so I know its hit an anniversary because our payments just got indexed by CPI.

Also threw $5000 onto the loan yesterday and was surprised by how little effect it had. Reduced the loan term by a little over a year, saving $5800 in interest.

One day I'm going to have to start weighing up pros and cons of actually paying out this loan, the time remaining is very short, the loan terms really aren't very good but we can't refinance to a better one.

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Well, we've just hit the anniversary of having our current home loan, which means soon we've had the house for a year. Time flies! And we have one of 'those' loans, so I know its hit an anniversary because our payments just got indexed by CPI.

Also threw $5000 onto the loan yesterday and was surprised by how little effect it had. Reduced the loan term by a little over a year, saving $5800 in interest.

One day I'm going to have to start weighing up pros and cons of actually paying out this loan, the time remaining is very short, the loan terms really aren't very good but we can't refinance to a better one.

what is one of 'those' loans? I've never heard of payments being indexed to CPI.

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Its through Homestart. The initial repayments were set at a fraction of our income, and the payments index each year. You can have the loan go backwards the first few years. Its for lower income earners and we had to show a truly massive amount of paperwork to get it.

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Its through Homestart. The initial repayments were set at a fraction of our income, and the payments index each year. You can have the loan go backwards the first few years. Its for lower income earners and we had to show a truly massive amount of paperwork to get it.

I didn't know we had ARM loans here. Is this just a south australian thing?

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Its through Homestart. The initial repayments were set at a fraction of our income, and the payments index each year. You can have the loan go backwards the first few years. Its for lower income earners and we had to show a truly massive amount of paperwork to get it.

Oh.... I thought HECS!

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Also threw $5000 onto the loan yesterday and was surprised by how little effect it had. Reduced the loan term by a little over a year, saving $5800 in interest.

That sucks.

Commiserations, RE.

I always felt that one of the few compensations of having a newish mortgage was seeing how much you could crop off it, by paying in a little extra.

Saving $5800 by paying in $5000 is better than nothing, but not exactly the impact you'd be hoping for...

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That sucks.

Commiserations, RE.

I always felt that one of the few compensations of having a newish mortgage was seeing how much you could crop off it, by paying in a little extra.

Saving $5800 by paying in $5000 is better than nothing, but not exactly the impact you'd be hoping for...

I pay an extra $40 a week over my initial min required payments and pay half the monthly payments every two weeks (ie pay an extra month every year). also I have not reduced my payments, while IRs have dropped 1.17% over the 14 months I've owed the house.

For my efforts I've managed to pay off 1.8% of the principle. If I had only paid the min and reduced payments as IRs dropped I'd have paid off well under 1% off the principle.

Edited by zaph

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We've had the loan 1 year, pay bare minimum and have 10 years remaining. If we refinanced those minimum payments would drop dramatically. Its a strange loan. I see people on Somersoft with loans 3x bigger who have lower repayments than we do.

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its thru the sa housing trust isnt it., yeah i applied for 1 of them. BASICALLY SAME MORTGAGE, ./ RENT AS renting a trust house .but yeah if numbers dont add up you end up in massive debt. and wouldnt allow extra payments when i asked.

http://www.homestart.com.au/home-loans/why-choose-homestart?utm_expid=486203-0&utm_referrer=http%3A%2F%2Fwww.homestart.com.au%2Fhome-loans%2Fhomestart-home-loan#repayments

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You can make as many extra payments as you want, add extra each week ... the website has options for all that.

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