Make Good Use of Mortgage Rate Cuts
If your mortgage interest rate has been reduced recently, you might be enjoying paying less each month. But what are you doing with the extra money? Since most of us were surviving before while making a higher mortgage repayment each month, we could continue to survive on the same income - and we should find a good way to invest the extra money we’re saving.
One obvious thing is to continue paying the mortgage back at the same repayment level - or depending on your loan set-up, paying the extra amount into an off-set or savings account to use to make a lump sum payment on the mortgage at some stage. This will help you save interest and years off your loan.
Alternatively, if you have credit card or other personal debts, use the extra money you are saving to pay off these debts more quickly. If you are in a better position and are debt free, then the money you are saving by having lower repayments on your mortgage could also be directed into your retirement savings accounts. It’s up to you to decide where the money is most needed, but the most sensible thing is to choose one of these options rather than just spending it as an unexpected windfall.
This entry was posted on Monday, March 16th, 2009 at 3:01 am and is filed under Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
