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Bring the tax breaks home

The recent personal tax cuts could well find there way into the housing market as people have more disposable income to put towards their property requirements.

As this week sees increases in the pay packets of many Australians, this may be a good time to remember that putting the "windfall" - together with any tax refunds - straight into your mortgage could save tens of thousands of dollars, as well as increasing the equity in your home.

Resi's National Manager for Consumer Advocacy Lisa Montgomery said this week that even someone receiving a small tax cut of only $10 a week could save "more than $20,000 over the life of their home loan by putting this money into their mortgage."

"A person receiving a bigger tax cut of $40 a week could save more than $65,000* over the life of their loan by redirecting this money into their mortgage," Ms Montgomery said.

"In the process they are building increased equity in their home, as well as extra funds to draw on if interest rates rise again and their finances get tight."

(Figures are based on a 25-year $200,000 home loan with an interest rate of 7.57% p.a.).

- tax, housing, investment

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