01 Aug 2022

What are the benefits of not discharging a home loan when funds are sufficient to pay off my home loan?

Not Discharging Home Loan

If you are not ready to repay your mortgage, that is okay! Having the right money is not enough of a benefit to make a large decision. Instead, ‌focus on the advantages and disadvantages of discharging a mortgage by making large repayments.

It is not always beneficial to repay your mortgage quickly. For example, mortgages are technically the cheapest credit that lenders offer. It is a great way to boost your credit score and reports by having an active mortgage account that is paid monthly or fortnightly. 

Sometimes, it is tempting to want to be debt free, but is it worth it? You can always use the savings for discharging your mortgage to change your home. Small changes can lead to huge increases in value. Renovating spaces like your home’s kitchen and bathroom when you want to sell your home for a profit can be a great game changer.

In some states in Australia, there are tax benefits to paying a mortgage monthly. If you want to keep this tax benefit, it is not a good idea to repay your mortgage early or discharge the mortgage no matter how many funds you have left.

If you are still unsure of what to do, contact a Mortgage House lender to discuss why discharging is or is not a good idea!

Not Discharging Home Loan Conclusion

There are disadvantages to discharging a home if you are not ready. Mortgage House lenders understand how confusing these terms and steps are. If you still have questions, ‌reach out soon!

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