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In this latest episode of Real Money Talk, Brendon and Graham talk about ways to pay your mortgage in times of increasing living costs.
Start saving the difference now. If your fixed rate rollover is coming up, start saving the difference now. By doing this you will be able to work out if the increase is going to be manageable for you, or if you have to work out other options. Plus, whatever you save between now and the rollover will help offset the increase when it rolls around.
Take a KiwiSaver contributions holiday. Not ideal as this means less into your retirement fund, but a short-term option none the less.
Use your savings. Not the greatest feeling, but it is an option, and possibly better than some of the others down the list. Take advantage of unused lines of credit, or redraw facilities on your Home Loans.
Rent out your spare room to a boarder. If you have a rumpus room or hobby room, you could rent this out to a boarder, maybe even family or a friend. The couple of hundred dollars a week for the room will help cover the cost of the mortgage.
Use your KiwiSaver. Apply to KiwiSaver under the hardship category to get a lump sum to assist with the extra payments.
Extend the length of your bank loan term. This will reduce the fortnightly or monthly payment amounts.
Refinance to another bank. You may be able to get better rates and potentially reap a cash payment to use on your mortgage. (Beware of break fees and legal costs though).
Increase your income. Could you increase your hours, or even take on a second part-time job?
Ask your family for help. Do you have adult children who can contribute? Or parents who can help?
Rent out your house. Then rent yourself, somewhere for cheaper.
Sell the house and downsize. The last option, and worst option, but it may be the necessary option.
This post is intended as general advice. Always talk to your adviser about your own situation 💚
Our mortgage advisers may be able to help you out with some options. Their advice is free.