Hi,
this is my first post…great site!
I have one investment property io $219,000
rent=$295 pw, property value approx $340,000. I also have a 216,000 loan on my personal prop.
I currently am paying $1600 p&i 5.95% on my personal prop pm but am contemplating paying fortnightly. Does anybody have pro’s /con’s. I understand that fortnightly I am actually paying more per calendar year, is there something I am missing?
I hope this topic is not too common
[
]G’day Captain…
Paying fortnightly will serve you well.
The reality is that you are making an extra 1 months payment pa.
Don’t forget though,1600×12/26=$738.46 = 25 years
Needs to be 1600/2 =$800pf *26 = 19.5 yearsFor example…a 25 year loan and paying fortnightly will reduce your term to about 19.5 years…that is a lot of interest saved.
However….only pay the minimum required on your Investment Property while you have a mortgage on the family home. No disadvantage whatsoever…especially if you have an offset account to redraw if need be.
Cheers
Billfromoz
that was a good explanation of benefits of more frequent payments – but that only works if your loan permits this… Check the loan documents, it may have a specific paragraph that fortnightly and weekly repayments would not speed up the process. This does not appear to be common issue but happens with some smaller lenders.
Cheers
]
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