Advice • Tips • Inspiration

Do you want to pay off your mortgage faster?

Your home loan is most likely the biggest commitment – and largest amount of debt – you will take on in your entire life.

Paying it off as fast as possible is something many people aim for to help save thousands of dollars in interest and relieve stress associated with debt. For those who wish to tackle their debt head on, we have a few simple tips to start reducing your mortgage now!

1. Attack your capital with extra repayments. Every dollar you put in over the minimum payment will go towards the principal. During the first few years when you are mostly paying off interest, this can be especially rewarding. Even rounding up your payment to the nearest $50 or $100 can help chip away at the principal which will lower the amount of interest you pay. Be sure your extra repayments come off the principal though, and are not merely set aside for the next payment.

Try using a mortgage calculator to compare how adding even a small amount to your payments can make a huge difference in the length and amount of interest you pay on your loan.

Check out some bank mortgage calculators here:



Bank of Queensland

2. Alter your payments to weekly or fortnightly. There are 12 months in a year and 26 fortnights, meaning if you change your repayments to fortnightly, you will pay off more in a year. Say your repayments are $2000:


Monthly Full Payments – 12 x $2000 = $24,000


Fortnightly Half Payments – 26 x $1000 = $26,000


Paying fortnightly will leave you $2000 – or a whole payment – better off a year. The same applies for weekly repayments. Adding this additional payment a year will help reduce the length of your loan and you won’t even notice!

3. Invest in an offset account. An offset account is a way to reduce the interest payable on your loan. In very basic terms, an offset account is a savings account that is linked to your home loan. The amount of savings you have in this account is then “offset” against the loan, meaning if you have $10,000 in savings and your loan is $150,000, you will only pay interest on $140,000. Beware of extra transaction charges that may surround offset accounts though. It is best you do your research and speak directly to your bank regarding these accounts being used to pay your mortgage faster.

4. Consolidate all your debt under your home loan. Interest rates on personal loans or credits cards are much higher than the rate on your home loan. Ask your lender if it is possible to consolidate all of your debt under your home loan to reduce the amount of interest you are paying.




5. Keep on top of market. Take the time to check out other banks or lenders to keep you ahead of the game. It may seem obvious, but staying informed on market trends is important. Researching loans with lower interest rates or better incentives can save you plenty of money, and if you do it properly, can even be used to negotiate with your current lender.

When doing your research, make sure you check if there are any exit fees associated with your loan. Do the math, and if the savings are still worth it, go for it!

Try using a site like iSelect to help you compare a loans.

6. Use your savings to pay off debt. While it is important to have emergency savings to cover a few months of expenses, you may be better off putting any other savings on to your mortgage. Generally, you will never earn more interest on your savings than what your borrowings are costing you. Logic then follows that it is more beneficial to pay off your debt first rather than having a savings account. For a more thorough run-down of this, visit The Money Saving Expert.

Don’t just sit around and wait to pay your mortgage payments every month. Be proactive, and always discuss all your options with your bank, lender or broker.

What do you do to help pay off your mortgage faster? Let us know in the comments!


*Hotondo Homes are not financial experts. You should always seek independent legal advice when looking to reduce the amount of your mortgage.

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