3 tips for saving while paying off a mortgage

Paying off a mortgage can be a lofty task indeed. With those weekly payments coming out of your account, you may have nothing left for other financial goals such as saving for a holiday or perhaps even making extra mortgage repayments.

It doesn’t have to be that way. With smart advice courtesy of one of Mortgage Choice's experienced mortgage brokers, your mortgage needn’t be an impossible burden, leaving little room for reaching other goals. To get you started, let’s have a quick look at three ways that you could free up some room in your finances while paying off a mortgage.

Cut the luxuries

MoneySmart data suggests that the average Australian spends $32 a week dining out and a further $20 on bakery products. This seems like a completely reasonable amount, yet the fact is it’s a luxury that could easily be sacrificed in the name of achieving your financial goals.

Doing this doesn’t mean you must subsist on two-minute-noodles and meal replacement formula. Instead, just have a close look at your expenditures and see where you can cut any unnecessary costs. The money that this saves you could go towards securing an investment home loan and starting your property empire.

Rent a room out

Generate extra income and gain a new house mate to hang out with, all in one fell swoop. Not only will you be slightly wealthier and gain a new companion, but you may also be able to claim part (or all) of your interest payments on your loan back as tax deductions, according to the Australian Taxation Office.

This extra cash, could go a long way towards saving for that second property, or even a couple weeks on a tropical beach in Bali.

Refinance

On August 2 the Reserve Bank lowered the cash rate to an all time low of 1.5 per cent. This change has led commercial banks to pass on savings to customers, resulting in record low home loan rates.

If you secured your mortgage a year or more ago, refinancing could potentially help to lock in a lower rate and save you money – that could be spent on more important things.

If you’re struggling with your mortgage or just need a word of advice Mortgage Choice is here to help.

Our experienced mortgage brokers specialise in finding suitable loan products for your needs and will be there to help from the first payment to the last.