What are the Benefits of not Discharging a Home Loan When Funds are Sufficient to Pay Off My Home Loan?
One of the biggest milestones in homeownership is when you make your final mortgage repayment. Paying off your mortgage, also known as discharging your home loan, means you now officially own your home. However, while you may think paying off your mortgage is beneficial, there are some benefits of not discharging your home loan, even if you have sufficient funds to do so.
Benefits of Not Discharging Your Home Loan
One of the biggest benefits of not discharging your home loan is having the ability to access your home loan account. The funds in your home loan account allow you to:
- Increase the value of your home through renovations
- Increase your wealth by purchasing an investment property or second home
- Claim certain tax benefits
- Consolidate your debts at a cheaper interest rate than other loans, such as a personal loan or with a credit card
- Increase your superannuation, which can help you save for retirement.
Other beneficial features of a home loan account you should consider before discharging your home loan include:
- This account being the cheapest credit you can get from lenders
- Tax-deductible mortgage repayments on rental properties
- Having the bank hold on to your property title
Even if you can afford to pay off the rest of your mortgage and discharge your home loan, you should weigh the benefits of keeping your home loan account open. The experts at Mortgage House can sit down with you and discuss your options, allowing you to decide if discharging your home loan is the right option for you.