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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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Institution Product Title Rate (%) Details
eMoney Pro Pack 75 (loans below 75% LVR. Contact us for loans above this LVR) 6.08  
UHomeLoan - Refinance only (6.14%p.a incl 0.20%p.a lifetime Loyalty Discount) 6.14
State Custodians Standard Variable Offset Loan 6.22
IMB Budget Home Loan (No Application Fee) 6.32  
MyRate.com.au - Advantage Rate Loan 6.35  
Institution Product Title Rate (%) Details

Rates for a $250,000 standard loan. The 3 year tabs show loans that are fixed for 3 years.



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