Minimise your mortgage burden

Recent Domain research showed that Australian homeowners find mortgage repayments one of the most stressful aspects of owning their own home, as well as rising energy bills, insurance costs and council rates.

Well, it has been said that ‘the best cure for stress is action’, and it’s good advice. Here are a few steps you can take to reduce your mortgage – and your stress as a homeowner.

Find a better mortgage

It can help if you think of your mortgage as a possession or chattel – that it’s an item like a TV. If you’re unhappy with your interest rate or anything else about your mortgage, you can shop around and change it. Just beware of mortgage exit fees that may make a change unfeasible.

Australia’s mortgage interest rates are very low right now – with the average rate sitting at around 5 per cent – so it makes sense to at least check whether refinancing your mortgage is worthwhile. Find yourself a good mortgage broker and get them to explain their commission and fee structures before you sit down to talk strategy with them.

Get a home loan health check

Many financial services companies offer a home loan ‘health check’ service. And if you’ve got a spare minute, Fairfax has a free online home loan health check tool you can use right now.

Open a mortgage offset account

Another option to discuss with your financial adviser is the viability of switching your mortgage to an offset account. As always, it is important to be informed, so you should seek help from a trusted financial adviser to ensure you understand all the fees and costs involved.

Take advantage of mortgage tax breaks

Whether you’re a homeowner or a property investor, your mortgage can provide effective and legitimate tax deductions that will greatly ease the pain at tax time.

Negative gearing is currently a hot topic among Australia’s finance media, but if you’re a property investor, the best advice is to look carefully at using negative gearing to gain a foothold in the market by buying investment properties and continuing to live at home or rent with a group of people.

Continue reading the Guide to Cutting Homeowner Costs with: Key ways to reduce your home insurance costs