Life happens. Things change and sometimes those changes can impact the amount you can pay on your loan. Surprisingly though, banks do understand and making amendments throughout the course of your home loan can be done relatively painlessly.

Depending on the type of loan you have with your lender or bank you might even be able to make small changes without consulting them first. However, if you’re unsure how to make alterations it’s always best to ask one of our mortgage brokers.

One of the main obstacles you will face when trying to increase or decrease payments is something you would have decided on when you first started the loan process; do you have a fixed rate loan or variable? This matters mainly because if you do decide to make changes to your payment amount then your loan type and interest charged may be impacted. For this reason, it is important to keep in mind how the change in repayments will impact your long-term financial position. Sometimes, these things can’t be avoided and life can get in the way, but being one step ahead will give you peace of mind.

It’s safe to say that banks and home loan lenders would actually prefer you to decrease your repayment amounts as in the long term it means they benefit from the increased revenue from the interest accumulated on your loan. Of course, every lender is different but if you are planning on decreasing your loan repayments for a significant amount of time (12 months plus) then remember that it means long term you will essentially be paying more.

On the other hand, increasing your monthly repayments can actually solely benefit you the homeowner. On average for a $350,000 loan paid over the course of 30 years you will actually be paying back $638,000 – of which $288,000 is all interest! So, making lump sum payments or larger monthly repayments can mean that you 1. Pay it off sooner and 2. Essentially pay less interest on the loan. Paying off more is always a great option – it’s best to check with us how much extra you can pay off as some lenders do have a maximum yearly limit.

Sometimes decreasing your repayments to make them more manageable for you is all you need to do in that moment. It’s better to lower the amount that you will be struggling to pay any at all or to put too much stress on other areas of your life. Talk to your mortgage broker to see what changes can be made to your repayments to make your life easier.