5. Choosing a Variable Rate Mortgage for the Lower Monthly Payment

When you take a loan, be it home loan, property loan, car loan or any other personal loan, think twice before choosing a variable rate mortgage which actually means low monthly payment.

Variable rate can get complicated and costly during the later period of loan repayment; it usually starts with a low initial rate, and offer smaller monthly payments than fixed loans. But they pose the risk of rising rates in the future.

A fixed-rate mortgage is expensive, as the interest rate charge here is initially higher than the variable rate mortgage, but you'll save more later on because here you will not be exposed to a rate adjustment that can go out of your budget.

More: Why You Need Top-Up Insurance

6. Overpaying For Extended Warranties

An extended warranty is a maintenance agreement, offering warranty services to consumers for a prolonged period of 3 to 5 years and hence its cost’ extra over the item’s retail price.  On the other hand, standard warranty which can also be called as the manufacture warranty, offers free maintenance services during a period of one year.

Market expert says standard warranty is often sufficient. As majority of minor malfunctions occur within this first year of purchase, while major problems are more likely occur much later, beyond the reach of an extended warranty's term. Hence there is no need to go for a costly extended warranty whose cost-effectiveness is minimal and also comes with a long list of terms and conditions.

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