The lure of a good breather and exotic lands has a powerful pull on us. Yet for many homeowners, travel becomes a mere memory, as the responsibility of home loan repayments and the thought of building more debt can put the kybosh on big holiday plans. A long weekend camping up the coast becomes the destination of choice, rather than exploring Vietnam or travelling Italy.
But let’s face it, if you wait to pay off your home loan, you’ll be missing the best travel years of your life – for both yourself and, if you have kids, your family too. It’s when memories are created and bonds are built.
So to help you enjoy the present, even while you’re working towards the future, here are some tips on how you can travel with a home loan as luggage.
Work out a budget and put aside money for travel
The first thing to do is take stock of your finances. Getting a budget together will help you see just how much you need to cover your home loan repayments and costs of living, and from there, how much cash you can potentially put aside for holidays.
When working out your budget, be sure to properly account for all your expenses. Calculate how much you would spend on average each week, then add your regular annual, monthly and quarterly payments – mobile, Internet, pay TV, credit card, insurances, utilities, car rego and expenses and, of course, your home loan.
On the surface, this little exercise could put you off taking a holiday forever. But actually it will help you make a plan and create room in your budget for travel.
Using your home loan to save for a holiday
Once you’ve done your budgeting and created a savings target, use a separate account for your travel money. This way it won’t get swallowed up by your everyday expenses and you can watch your travel savings build.
A great way to do this is to use your home loan with a redraw facility as your holiday piggy bank. It not only separates your savings from your everyday account, but also gives you the added bonus of helping you save on home loan interest.
You can either add lump sums to your loan, or increase your repayment amount each month – which will also help set up a regular holiday savings pattern.
When you’ve saved enough and you’re ready to take off, you simply redraw the extra repayments and off you go.
With an ING home loan another little bonus is that there are no fees on redraw and no restrictions on how much of your extra repayments you can take out.
Start planning well in advance
With your home loan repayments and all the other costs of living, saving for this holiday may take a little longer than it used to when you were an excited, backpacking teenager. So start planning your holiday about a year out, to give yourself more time to save.
Avoid taking on additional travel debt
If your holiday saving isn’t going as well as you planned, it’s tempting to think about putting some things on a credit card, or even taking out a personal loan. But it really is best to pay for as much of the holiday as you can from your savings, as taking out more debt will only add to your list of expenses and costs when you return, which could put a dampener on any plans of future holidays.
Travel within your means
Can you afford to be away for a month or two, or even longer, travelling from country to country? Probably not. Not unless you’re thinking of renting out your house.
Look at keeping your trips between two weeks to a month instead and pick out bucket list destinations you really want to see. You also need to be realistic about your accommodation options. Luxury can be very enticing, but not if you can’t afford it.
If an overseas escape looks out of the question, explore our backyard. Australia is an amazing place, full of varied destinations. Many of which you probably haven’t seen. And many within a couple of days’ drive.
Other ways to travel for less
- Travel in low or shoulder season. The destination is the same, but the prices can be halved and it’s usually not as crowded. But do keep an eye out for common low season problems – like cold rainy winters, or monsoon and wet months.
- Check out travel sites regularly for special flight and accommodation offers and to save money try to fly mid-week (rather than on the weekend).
- Pick a place where the cost of living is low and the exchange rate favourable. You can stay in Greek island beachfront hotels, for example, from as little as $30 a night and eat and drink in the tavernas for peanuts (or olive pips as the case may be).
- Explore the myriad of affordable accommodation options, from home stays and B&B’s with shared bathrooms, to Airbnb room rentals, home exchanges and family rooms in hostels. They will help you save, while also giving you a better chance to meet the locals.
Talk to our specialists about using your equity
If you have significant equity in your home, another option is to use some of it to help fund your holiday – especially if you’re finding the saving option is not working for you.
To find out how much equity you have, what you can borrow and see if this move is right for you, talk to one of our home loan specialists.
*Rebate Offers for Orange Everyday Customers
The Global ATM Rebate Offer and the International Transaction Fee Rebate Offer will apply for the next calendar month when you perform the following during the current calendar month:
- deposit at least $1,000 from an external bank account to any personal ING account in your name (excluding Living Super and Orange One), and
- also make at least 5 card purchases that are settled (and not at a ‘pending status’) using your ING debit or credit card (excluding ATM withdrawals, balance enquiries, cash advances and EFTPOS cash out only transactions).
Card purchases includes in store credit or EFTPOS purchases, online purchases, regular card payments, payWave, Apple Pay, and Google Pay transactions made with an Orange Everyday Visa card, Orange One or Orange One Platinum Visa card or Nil Interest Visa card provided with an eligible ING home loan. When using the phrase ‘settled’ card purchases in a calendar month, we mean that the purchases made on your card must be fully processed by the end of the last day of that month. Card purchases made in store or online this current calendar month which are at a ‘pending status’ and do not settle until the next calendar month do not count towards the 5 card purchases needed this current calendar month.
When determining if you are eligible under the offer, we also take into account the behaviour of any of your joint account holders or additional cardholders.
- for ATMs in Australia – any ATM fee charged by the ATM operator is rebated immediately following the transaction,
- for ATMs outside Australia – ING will rebate the International ATM withdrawal fee of $2.50 immediately after it is charged and rebate any ATM fee charged by the ATM operator at settlement of the transaction. While the transaction is pending the amount of the acquirer fee will be deducted from your available balance and will be reinstated after the transaction is finalised. ATM transactions outside Australia can take up to 5 business days to finalise, and
- for ING international transaction fees – ING will rebate the International Transaction fee of 2.5% of the amount of the international transaction immediately after it is charged. Merchants may charge you a separate fee for their services (which is not rebated under this offer).
If eligible, the offer applies to all accounts held in your name (either single or joint account).
This offer may be changed or withdrawn at any time at ING’s sole discretion.
Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Before making any decision in relation to our home loan products you should read the relevant Terms and Conditions booklet and Fees and Limits Schedule. To view these documents you may need Adobe Acrobat. Products are issued by ING.
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The information is current as at publication. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Deposit products, savings products, credit card and home loan products are issued by ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292, AFSL and Australian Credit Licence 229823. ING Living Super (which is part of the ING Superannuation Fund ABN 13 355 603 448) is issued by Diversa Trustees Limited ABN 49 006 421 638, AFSL 235153 RSE L0000635. The insurance cover offered by ING Living Super is provided by Metlife Insurance Limited ABN 75 004 274 882, AFSL 238096. ING Insurance is issued by Auto & General Insurance Company Limited (AGIC) ABN 42 111 586 353 AFSL Licence No 285571 as insurer. It is distributed by Auto & General Services Pty Ltd (AGS) ABN 61 003 617 909 AFSL 241411 and by ING as an Authorised Representative AR 1247634 of AGS. All applications for credit are subject to ING's credit approval criteria, and fees and charges apply. You should consider the relevant Product Disclosure Statement, Terms and Conditions, Fees and Limits Schedule, Financial Services Guide, Key Facts Sheet and Credit Guide available at ing.com.au when deciding whether to acquire, or to continue to hold, a product. Before interacting with us via our social media platforms, please take a minute to familiarise yourself with our Social Media User Terms https://www.ing.com.au/pdf/Social_Media_User_Terms.pdf.