Only 46% of households are able to save each month, according to a recent survey by Me bank. 42% are breaking even and 12% are over spending by drawing on savings or loans or home equity.
This is why it is more important now than ever, to ensure that your loans are structured in a way that maximises your savings in interest and charges.
On a typical home loan of $470,000, the difference between paying 5.08% p.a. or 4.87% equates to approximately $20,000 difference over a 25 year period. In more tangible terms, this is around $800.00 per year that you could be saving, just by switching your mortgage.
Beware though, if you owe more than 80% on your property, you may need to wait before switching, as the insurance premiums associated with higher percentage loans, will likely eat away at any anticipated interest savings.
Furthermore, those whom are paying high interest rates on credit and store cards in exchange for rewards points, need to have a look at how much they are actually being rewarded. If you pay your credit card balance in full each month, than your rewards points are worthwhile. However if your credit card has several thousand owing against it, than it is likely that any bonuses you receive from rewards programs are also being extinguished by high interest charges.
Opportunities for saving on interest and charges also exist when you are purchasing a new or used vehicle under finance. The quoted repayments from the dealership can add up to be one or two tanks of fuel per month that you are paying on interest unnecessarily if your loan is not structured appropriately for you.
Lastly, personal loans are notorious for having high interest rates. Again, there are options available that can help you save thousands in interest, for example, if you are able to offer your new vehicle as security, you may be rewarded with a sub 10% rate.
To find out more about how you can save on unnecessary extra interest repayments, contact Bee Finance Savvy on 1300 140 554.
If you haven’t already done so, follow us on Facebook for further updates and helpful tips.