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Reducing The Mortgage

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How to save thousands on your mortgage

The following examples are calculated using the Mortgage Calculator. Please try your own examples at your leisure.

A starting example

Your new home costs $300,000.
You have a $30,000 deposit and borrow $270,000 over 20 years at 8.0% interest. Monthly repayments on a table mortgage are $2,258.
Total interest paid over the term of the loan is $272,103.

Now, let's change some of those variables to see how much interest you can save.

Increase your deposit by $20,000

You now have a $50,000 deposit and only need to borrow $250,000 over 20 years at 8.0% interest. Monthly repayments are $2,091.
Total interest paid over the term of the loan is $251,864. By increasing the deposit by $20,000, you have saved $20,239 in interest costs and you have an extra $167 each month.

Or, reduce the length of your mortgage to 15 years

You have a $30,000 deposit and borrow $270,000 over 15 years at 8.0% interest. Monthly repayments are $2,580.
Total interest paid over the term of the loan is $194,447. By reducing the term of the loan by 5 years, you have saved $77,656 in interest costs.

Or, increase your payments

For example, if you were able to increase your monthly repayment by $200 in the original example, from $2,258 to $2,458 per month, you'd reduce the length of your mortgage by approximately 3 years and 6 months. This would result in a saving of $54,576 in interest costs.

Or, reduce the interest rate by 0.25%.

You have a $30,000 deposit and borrow $270,000 over 20 years at 7.75% interest. Monthly repayments are $2,217.
Total interest paid over the term of the loan is $261,975. By reducing the interest rate by 0.25%, you have saved $10,038 in interest costs.

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