Take advantage of the good times

There is virtually no prospect of a rise in interest rates, or a fall for that matter, before the federal election due in the last quarter of the year. No significant data has been released since last week's wages figures, which put the icing on the cake as far as evidence of the country's remarkable non-inflationary economic expansion is concerned. Inflation is easing off its highs and wages growth is restrained. The old economic truism that hamstrung governments and their monetary authorities in the 70s and 80s - that you can't have low unemployment and low inflation at the same time - is dead in the water, at least for now. For home borrowers it means job security and good economic times with interest rates that are still not high in historical terms - even if they are not as low as they were. Its an opportunity for the many homebuyers who have borrowed heavily in recent years to pay a bit extra off their mortgage each month while conditions are good. Lighten the load of that mortgage monkey on your back. There is no guarantee that these rosy economic conditions will stay - forecasts are for inflation to rise again next year and if it does the threat of higher interest rates will return. Remember, every $1 paid off early saves $2 in interest over the full term of a home loan. For example, a current borrower with a $275,000 loan who, five years into their loan, increases repayments by just $22 a week will save $27,500 in total interest over the life of the loan. That's a saving equal to 10 per cent of the original loan amount. Test the savings power of extra repayments for your loan circumstances.