Paying down mortgage?

Our Experts Answer:

I am missing quite a bit of information here so it is a hard question to answer. But here are some points to consider. You don't mention if you have an owner occupied property. If you do, there is personal debt attached to this and generally it is better to focus on repaying this before looking to reduce the investment debt. See your accountant if this applies to you. Also, you need to be careful when paying more than the required amount on a mortgage when it is fixed. Some banks however allow this up to a limit. For example ANZ and National Bank will allow you to pay the lower of $10,000 per annum or an additional 5% of the loan balance above the required fixed-rate mortgage payments. So in this case you may be able to make additional payments. Break fee calculations differ quite a bit between banks. It may be worth finding out what your actual break fee is with banks offering lower rates than your current one. Do a cost / benefit analysis to see if it is worth breaking.