5 tips for effectively managing your mortgage repayments.

If you’re concerned about how to best manage your money, struggling to cover your mortgage repayments and other living expenses, you’re not alone.

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Recent data shows that more Australian homeowners are facing mortgage stress than ever before.

Here are some tips to help you better manage your finances and make your next mortgage repayment.

1) Create a Realistic Budget

Understand your financial situation by creating a realistic budget that includes all your income sources and expenses. Prioritise your mortgage payment within your budget to ensure its paid-on time each month. Be honest and cut out all the spending leaks, i.e. unused memberships, subscriptions, and impulse buys. A simple review could save you hundreds of dollars a month.

2) Set Up an Emergency Buffer

Establishing an emergency fund can provide a safety net in case unexpected expenses arise, such as medical bills or car repairs. Aim to save enough to cover at least three to six months' worth of living expenses. Having this buffer can help prevent you from stressing out over unexpected bills or possibly missing mortgage payments during tough times.

3) Automate Payments

Set up automatic payments for your mortgage to ensure you never miss a due date. Schedule payments directly from your bank account to your mortgage. Automating your payments not only ensures they're made on time but also assist with budgeting as most people adjust their living expenses to align with what they have left.

4) Make Biweekly Payments

Understanding what you can afford to pay as opposed to what the bank requires you to pay is the most important number. Once you understand this number you can set up direct debits more regularly and instead of making monthly payments, consider switching to biweekly payments. By paying half of your monthly mortgage payment every two weeks, you'll make 26 half-payments each year, which is equivalent to 13 full payments. This extra payment each year can help you pay off your mortgage faster and save significant interest costs.

5) Monitor Interest Rates

Keep an eye on changes in interest rates and ensure you are remaining competitive. Partner with a business like FinancePath who can do the heavy lifting, monitor your loan, and keep you update to date with what the most appropriate options are for you.

We’re here to help.

There is no better time than now to review your current goals and understand the best options to help you get there. Get in touch directly to our team on 1300 7800 440 and we will be more than happy to assist.

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