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Interest Rate Drop… Crack out the Champagne! Wait!!! This Champagne costs more than I saved in that rate drop!

November 3, 2011 4:25 pm
posted by James Parnwell

interest rate

There is this funny psychology that makes us feel fantastic when we get a win. An unexpected interest rate drop, a winning horse in the office sweepstakes or even an extra M&M out of the vending machine. We must get a rush of some chemical to the head that makes us feel like Bill Gates all of a sudden.

What does an interest rate drop really mean to your monthly budget?

Precious little, I’m afraid, especially if you are a NAB customer. If you have a mortgage of $300,000 you will only have an extra $50 bucks. You will need more interest rate drops to really make a meaningful difference!

Loan Amount Monthly Saving

$100,000.00

$16.79

$150,000.00

$25.18

$200,000.00

$33.57

$250,000.00

$41.96

$300,000.00

$50.36

$350,000.00

$58.75

$400,000.00

$67.14

$450,000.00

$75.53

$500,000.00

$83.93

$550,000.00

$92.32

$600,000.00

$100.71

 

Honestly, the best advice I can give you is to put the Champagne back into the cupboard and leave the $50 in the loan as an extra repayment.

Are you sitting down? No really! You need to be sitting down for this! The extra $50 a month on your $300,000 mortgage over 30 years  will save you up to 2 years, 3 months from your loan and $35,000. That’s right 35 thousand big ones!

NOW IT’S TIME GET OUT THAT CHAMPAGNE!!!

Article by James Parnwell

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