What about that Medicare cheque or Health Fund refund? If you paid for the treatment months ago and you haven’t missed the money put it straight into your home loan.
Here are a couple very rough examples:
- A lump sum of $1000 during the second year of your home loan you will actually save you around $8000 in interest over the term of the loan and could reduce the term by 3-4 months.
- A lump sum of $500 during the fifth year of your home loan could save you up to $6000 in interest and reduce the term by 1-2 months
- A lump sum payment of just $100 made in the first year could save you over $800 in interest over the term of the loan
This example is based an initial loan of $300,000 over 30 years at a rate of 7.5%. The savings are not exact and are designed to be nothing more than thought provoking. The scenarios are generic and do not take individual circumstances into account. You should seek independent financial advice before making any significant changes to your financial products.