The article below highlights what I am seeing and working with clients to reduce their home mortgage as quickly as they can. If you haven’t considered accelerated repayments, an offset account or Today/Tomorrow/Emergency debt you probably aren’t making as bigger dent in this ‘bad’ debt as you could be.
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Home owners are taking advantage of record low interest rates to pay off their mortgages faster.
The National Australia Bank says new figures show 85 percent of its mortgage customers pay more than their minimum monthly repayments, Fairfax Media reports.
Such NAB customers are ahead by an average of 13 months now, compared with 12 months a year ago — a “meaningful” shift considering the size of the bank’s mortgage book, said Antony Cahill, NAB’s executive general manager of lending and deposits.
The bank has about 16 percent of the mortgage market with a home loan book worth $241 billion.
NAB said its customers are also paying off credit card debt faster, with the number of accounts paid in full rising six percent in the past year.
“These are themes that point to the Australian consumer being a little bit more careful, a little bit more prudent in terms of understanding debt and ensuring they keep that under control,” Mr Cahill was quoted as saying.
Last week the major banks cut fixed interest rates to new lows of less than five percent.