Owning a house or condominium is often a significant goal for many salaried employees for various reasons, such as creating stability in life, expanding living space to start a family, or ensuring long-term value instead of renting.

However, most property loans come with long-term contracts of about 30 years, which can take a significant portion of one's life to fulfill. The monthly payment amount depends on the bank's interest rates, and each monthly payment is divided into "interest payments" and "principal payments," which can discourage salaried employees.

As a bank specializing in home loans, TTB recommends 5 tips for salaried employees to manage their finances effectively, allowing them to pay off their home loans faster than planned and achieve their dream of homeownership more easily:

1. Round Up Monthly Payments to a manageable whole number, but not so much that it becomes a strain. Focus on consistency every month over the long term. For example, if the usual monthly payment is 13,500 THB, round it up to 15,000 THB, meaning an additional 1,500 THB per month. While this extra amount may seem small, consistently doing this every month can significantly reduce the principal over time without waiting for a lump sum.

2. Make Lump-Sum Payments for salaried employees with high monthly expenses who may not be able to follow the first technique consistently. They can opt to reduce the principal by making lump-sum payments, such as using year-end bonuses. Allocating a portion of this bonus to pay down the home loan will reduce the principal and save on interest costs. Making lump-sum payments is especially beneficial in the early years of the loan when interest rates are lower, allowing for a more significant reduction in the principal.

3. Refinance Your Home is a popular technique that can effectively reduce interest rates. Typically, refinancing can be done every three years, which involves applying for a new home loan to switch from the original lender to a new bank for a lower interest rate. However, switching banks may incur various costs, so it’s essential to calculate whether the total costs will result in actual savings.

4. Retention is another technique for those who prefer not to switch banks. You can request a reduction in the interest rate from your current bank. This allows the bank to consider adjusting the interest rate without the hassle of submitting new documents. However, while retention may seem more convenient, the interest rate reduction is usually not as significant compared to refinancing with a new bank, but it is still lower than the rate that may increase in the fourth year.

5. Keep Monthly Payments the Same After Refinancing or Retention. After refinancing or retention, the monthly payment will decrease due to the new lower interest rate. However, if you want to pay off the home loan faster, you should continue paying the same amount as before, using the difference to reduce the principal. This method can help you pay off your home loan more quickly without needing to make lump-sum payments.

These 5 techniques serve as a crucial guide for salaried employees to unlock their home loan burdens and achieve financial freedom more quickly. Particularly, refinancing every three years is key to preventing home loan interest from accumulating. Salaried employees still caught in the cycle of home debt can apply these techniques to suit their financial management strategies and personal readiness, ensuring they can pay off their home loans faster.

For salaried employees looking to refinance their home, TTB Home Loan Refinance is another helpful option that can save you hundreds of thousands in interest and provide a shortcut for many to pay off their home loans faster. Currently, TTB is offering a year-end promotion with reduced interest rates, featuring a special fixed rate of just 1.90% for the first year (down from 2.25%) or a fixed rate of 3.29% for the first three years (down from 3.49%). Additionally, there are no fees for property appraisal, fire insurance, or mortgage registration, and you can repay over a maximum of 35 years with an approval limit of up to 100% of the appraised property value or 50 million THB, ensuring a good financial life today and in the future.

For more information, click here: https://www.ttbbank.com/link/home-refinance-pr

Note: Borrow only what is necessary and repay within your means: Interest rates throughout the contract term are 4.97% – 5.39% per year, with the MRR rate at 7.83% per year as of October 3, 2023. *Floating interest rates may change up or down. *Loan approval conditions are subject to the bank's criteria.