Mortgage repayments are a hefty bill. However, it is exciting to know that once that mortgage is paid off, the house is all yours. So, there is a light at the end of the tunnel! But it is totally normal to feel like your current repayments are pinching your budget. With the cost of living, our expenses are increasing. If you are wishing to lower your mortgage repayments to help ease your budget, we have put together 4 ways you can do so.
1. Extend Loan Term
You can reduce the repayments by extending your loan term up to 30 years. However, it’s important to consider that you may pay more interest over the loan’s lifetime.
2. Reduce Repayments Temporarily
If you are currently paying at a higher amount than your minimum requirement, you could lower your repayments for a period of time. However, again, you could pay more interest over the loan’s lifetime, so it’s important to take this into account.
3. Apply for Interest Only
You could reduce your repayments for a period of time by only paying the interest and not the principal amount of your loan. For owner-occupied properties, this is typically only available for 3 years maximum. For investors, you can do this for 5 years typically.
However, again this option will likely increase your interest total over time. As this option doesn’t decrease the principal balance, therefore, increasing your total interest. For interest only options, you will still need to pay your loan off by the end of the loan term. So, your repayments would increase after you come out of the interest only period. However, for those needing to lower their repayments for a period of time, interest only is an option to consider.
4. Defer Loan Repayment
If you need to, you can consider a loan repayment deferral. If eligible, this allows you to pause your loan repayments for a short period of time. This can be a great way to free up your income to help you get back on your feet. However, just remember that this will likely increase the total interest you pay over the loan’s lifetime. You also may experience an increase in your minimum repayments down the track. It’s a good idea to speak to a mortgage advisor to see if this is right for you.
Need Advice? Speak to a Mortgage Advisor
Here at Money Compare, we have a range of resources to help you navigate your mortgage and world of home ownership. If you are struggling with your mortgage repayments, and wish to seek help, we can get you in touch with a mortgage advisor who can offer free advice and answer any questions you may have. Just click the button below and a qualified adviser will be in touch!
Get in Touch with a Mortgage Advisor
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