While your daily financial pressures may be what you usually think about, it is better to keep the long term in mind when managing your mortgage

Interest rates are one thing, but the rubber hits the road in personal budgeting when the mortgage payment comes out of your account.

That's the key short-term metric; is there enough in there to pay all your expenses?

But also keep your eye on the big picture; how much you will pay over the life of your loan.

Someone much smarter than me once observed, it's not the rate you pay, it's the rate you pay it off.

As anyone who has used our handy mortgage calculator will know, shortening your loan term will save huge amounts.

If you can pay your mortgage off 'faster', that is money you will keep.

A $250,000 loan paid off in 25 years at 6.25% will cost you $244,752 in interest, plus you need to pay back the original $250,000. That's a total of $494,752 you will pay over the 25 years.

But shorten your loan term to 20 years, and you will save $56,195. Remember, that's for the same $250,000 borrowed.

The downside is, your monthly payments will rise from $1,649 to $1,827, a monthly increase of $178 (or $6 a day).

So, by 'investing' $6 extra per day, you can have $56,195 in 20 years. (You might wonder that if your budget is so tight that you can't 'afford' an extra $6 a day, can you really afford a $250,000 mortgage?)

There are many variations, and our mortgage calculator can help you work them out in your particular case.

In fact, you can enter your desired repayment amount and the calculator will tell you how long your loan will last at a specified interest rate. (Solve for Loan Term.)

See all banks' carded, or advertised, home loan rates here.

Here are some current mortgage rates as at 7:00 am on Monday, July 21, 2014:

below 80% LVR	1 yr	18 mths	2 yrs	3 yrs	5 yrs
	6.05%	6.25%	6.09%	6.65%	7.15%
	5.95%	6.30%	6.40%	6.65%	6.99%
	5.99%	6.25%	6.39%	6.25%	6.99%
Kiwibank	5.99%		6.29%	6.29%	6.95%
	5.95%	6.30%	6.39%	6.65%	6.99%
Co-op Bank	6.00%	6.00%	6.00%	6.25%	6.89%
	5.85%		5.85%	5.85%	6.99%
	5.85%	5.99%	6.20%	5.95%	6.79%
TSB Bank	6.00%	6.05%	5.80%	6.60%	7.00%

You can also look at these rates on a Repayment basis. You can work out your own table using our mortgage calculator here.

We have prepared this one based on borrowing $250,000 over 25 years where you have at least 20% equity.

These are the monthly repayments on that basis:

below 80% LVR	1 yr	18 mths	2 yrs	3 yrs	5 yrs
monthly repayment	$	$	$	$	$
	1,618	1,649	1,625	1,712	1,791
	1,603	1,657	1,672	1,712	1,765
	1,609	1,649	1,671	1,649	1,765
Kiwibank	1,609		1,655	1,655	1,759
	1,603	1,657	1,671	1,712	1,765
Co-op Bank	1,611	1,611	1,611	1,649	1,749
	1,588		1,588	1,588	1,765
	1,588	1,609	1,641	1,603	1,734
TSB Bank	1,611	1,618	1,580	1,704	1,767

The monthly amounts are approximate. There is no warranty that an individual bank will calculate repayments in exactly the same way we have used, although it is likely. However, specific loan details may well affect the regular payment amounts due.

There are many strategies in managing your mortgage. A lower interest rate can often be negotiated, but that does not mean you need to lower your payment. That lower rate with an unchanged payment will get you paid off faster.

Always keep your long-term goal top-of-mind, compromise your short-term when you can.

--------------------------------------------------------------

Mortgage choices involve making a significant financial decision so it often pays to get professional advice. A Roost mortgage broker can be contacted by following this link »
--------------------------------------------------------------