Save with a line-of-credit loan
Disciplined borrowers can make use of the increasing range of line-of-credit loans, also called salary account or all-in-one loans, which offer the chance to make every spare dollar work to reduce your home loan. These loans allow your income to be paid directly into the loan account to reduce the loan outstanding sooner than waiting for the repayment due date. You are also effectively making larger repayments because you only withdraw the money you need to live on each month, leaving all surplus cash in the loan account to reduce the balance. In this way, the loan can be paid off much quicker and thousands in interest saved. Line-of-credit borrowers must be disciplined, however, and not withdraw more money over time than is going in. Income you bank must exceed your total expenses by at least the value of your principal-and-interest loan repayment before there is any financial benefit.