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Make your surplus cash work harder

Use cash savings to help pay off your loan quicker. Remember the old saying 'a dollar saved is a dollar earned'? If you have a home loan at 7 per cent, every extra dollar you pay off the principal is another dollar you are not paying 7 per cent on each year. If you instead put that extra dollar into a savings account you are only going to earn 2 or 3, perhaps 5 per cent at the most. Therefore putting savings into your loan earns you twice as much as a savings account. These days, redraw facilities available on most standard variable loans allow you to take back those extra payments if needed anyway. See also ‘Offset accounts and all-in-one loans’ below. Use BankChoice's Extra repayments calculator or Lump-sum repayment calculator to determine how much time and money can be saved.



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Today's Best Rates

Institution Product Title Rate (%) Details
Advantage Variable 6.63
Standard Variable Loan 6.87
Standard Home Loan 6.94
SMHL Standard 6.99
RAMS Standard Variable 7.23

Rates for a $250,000 standard loan. Popular loans are from the top 15 leading banks & credit unions. The 3 year tabs show loans that are fixed for 3 years.



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