5 Tips to Pay Off Your Mortgage Faster

Having a good understanding of your home loan and aiming to pay it off sooner will save you thousands over the life of your home loan.

So, when was the last time you looked closely at your home loan? Are you ahead on your repayments and how does your loan compare to others in the market? Analysing your mortgage could mean savings for you, as well as the opportunity to pay it off more quickly, invest in other assets or reach financial freedom sooner.

Check out our five tips for getting ahead on your home loan:
1. Make smaller payments, more often

By making smaller repayments more frequently, you could:

  • pay off your loan faster
  • pay less interest over the life of your loan.

If you make monthly mortgage repayments, consider making them fortnightly instead. For example, if your mortgage repayments are $2,800 a month, cut this in half and pay $1,400 each fortnight. As well as having more manageable payments to make, by the end of the year you’ll have paid off $36,400 rather than $33,600.

2. Pay a little extra

Minimum repayments are just that – for most loans there’s no reason you can’t pay more; even most fixed loans will let you pay off a little extra without penalty.

Small amounts can make a difference. Rounding up to a full number or contributing an extra $100 or even $10 can significantly reduce the length of your mortgage. Making lump sum payments may also be worth considering, such as putting all bonuses, tax returns and gifts into your mortgage.

3. Take advantage of low interest rates

While interest rates are low, you could take the opportunity to add a little extra your home loan and get ahead. Keeping your repayments at the same amount even when interest rates drop, you will pay down more of the principle with each payment and make a significant impact to reducing the length of your loan term.

4. Offset it

If you have an offset account as a feature on your loan, you should maximise its use. An offset account is linked to your loan and the interest payable on the loan from month to month is calculated by deducting the balance in your offset account from the current home loan balance.

For example, if your mortgage is $500,000 and your offset account has a balance of $20,000 in it, you will only pay interest on $480,000.

An offset account will save you interest while still giving you access to your savings, meaning you’re getting ahead on your loan without actually having to make extra repayments. If you’re an investor, it also means you can preserve the tax deductibility of your investment loans.

5. Make sure your loan is right for you

Your mortgage needs to suit you and your current circumstances – otherwise you could end up paying too much. If you think your loan or lender no longer fits your situation, it’s a good idea to speak with your mortgage broker. They’ll be able to find the right loan product for you and negotiate appropriate rates.


It’s also important to make sure that you aren’t charged fees by your lender for extra repayments or any other step you take to save on your loan. Our mortgage brokers at Right Financial can help you with these details and make sure that your loan allows you to pay down your balance sooner and with no additional costs or fees. Contact us to find out more.