Tuesday 23rd of August 2005

When reviewing your mortgage, ask yourself:
· Are you still making repayments which are as big as you can comfortably afford?
· Would you become mortgage-free faster by changing the structure of your mortgage or switching lenders?
· Will you pay less interest in the long term by borrowing against your mortgage to pay for other items, or by consolidating other debts?

Mortgage payments Boosting your repayments by an extra $50 per week can save you thousands of dollars of interest, and you’ll become mortgage free faster.

Doing a budget can help you work out whether you can afford to increase your repayments (visit www.sorted.org.nz for an easy Budget calculator). To work out how much you will save by lifting your repayments, use Sorted’s Quick Mortgage calculator

Changing the structure of your mortgage Changing the structure of your mortgage, for example switching some or all of your mortgage to a cheaper fixed or floating rate, or switching to another lender, may save you thousands over time.

Before making the change, it’s important to check out the costs and possible savings carefully. Possible costs include early repayment fees if your mortgage is on a fixed interest rate, the application fee for a new lender and legal costs.

Add up the costs and potential savings, and work out how long it would take for the savings to cover the costs. If it would take a long time for the savings to outweigh the costs, be cautious.

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