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October 05 newsletterReducing the mortgage
One of the biggest barriers to New Zealanders in achieving their financial goals is debt and, in particular, mortgage debt, which has increased hugely in the past few years.
Today, we launch our new mortgage calculator, designed to make it easier to weigh up the available options that may help reduce the financial burden of your mortgage. In particular it gives you the option of choosing your preferred repayment amount or the term of your loan.
The following are some examples that you can run through at your leisure.A starting example
Your new home costs $300,000.
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.
You have a $30,000 deposit and borrow $270,000 over 15 years at 8.0% interest. Monthly repayments are $2,580.
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.
Don't forget to consider some of our other tips and tricks.
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