Plea for help over those impulse buys

g setting aside $1 for travel/house extensions for every $1 we repay toward our mortgage, in addition to our current repayments. Is this a wise move? Also, is our cash reserve sufficient? Our car may need replacing in the next few years.

A. Let’s look first at repaying your mortgage faster than necessary.

Generally, it’s a great idea, except that yours is a fixed-rate loan and there’s usually a penalty if you repay it fast.

But wait - there’s hope. In these days of rising interest rates, banks are often keen for people to quickly pay off fixed loans, as they can then lend out the money at a higher rate. So they waive the penalty. Ask your lender.

If they won’t oblige, ask them to help you to work out whether it would be better for you to put the money aside in a term deposit until your fixed period ends and then use it for repayments, rather than pay the penalty.

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