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Hi guys, I have fixed my Home loan at 2.29 with com bank.I am allowed to pay extra 10000 a year.If I add 380 additional every fortnight. Does it help to reduce loan term and reduce interest?
Does the extra top up every fortnight worth?
Please advise
Should be in the forums.
Any additional repayments will help.
Yes.
Great question, just seems a bit off to ask that after fixing your HL
As long as the extra payment go towards offsetting the principal then yes it does help.
So the extra payments goes to the principal or is it depends bank?
Thank you
Oh boy, these are questions you should have asked your broker/lender or even google before signing the contract.
It wont reduce the term but will reduce interest.
Paying higher repayments will always reduce the loan term.
If possible, put the extra payments into a full offset account. That way the funds will be there for you to draw in case of an emergency
Fixed rate loans cannot be offset with an offset account.
Dont knwo why this was downvoted, it is true, unless you have a variable/fixed split
@Unskinbopbopbop - you do have an option to offset against fixed rate loan.
I've one through Credabl. Note they only cater to selective professions…used to include accountants but seems they may have stopped..
https://www.credabl.com.au/products/personal-loans/home-loan…
Not with CBA, with whom the OP has already stated they've fixed with.
I also got one thru Bank of Nigeria
It will reduce the term of your loan as a whole (not the fixed term contract) as it's being paid off faster and interest will also reduce as the principal is being paid off faster also.
Next time you take out a loan, don't be afraid to ask these questions before signing on the dotted line.
Yea, particularly fixed, there are big exit fees if you get it wrong
Maybe.