7 easy ways to get ahead with your mortgage repayments

By paying off your home loan ahead of schedule, you can save thousands off your total interest bill. Take a look to see how you can save – and become mortgage-free faster.

March 10, 2022

Make fortnightly payments

Instead of paying monthly, change to fortnightly payments. There are 26 fortnights in a year, so you’ll make an extra month’s repayment every year.

Pay a bit extra

Even small extra repayments can have a big impact over time. That’s because additional payments come straight off your loan balance – lowering the interest for all your future payments.  

Add a lump sum

If you have a bit of a windfall or get a bonus from work or your tax return, pay it into your mortgage account. It will come straight off the principal, lowering the amount you owe straight away.  

Shop around

Just because you’ve been with your lender for a long time, doesn’t mean you have to stay. You could find a lower interest rate with another lender; you could also speak to your current lender and ask for a lower interest rate – they would rather try to help than lose a customer.

Use a ‘redraw’ account

If you open a mortgage account with a redraw facility – this lets you pay extra off your mortgage, but you can take it out again if you need to. This makes it more reassuring, knowing the extra money will be there should you need it.  

Open an offset account

An offset account is linked to your mortgage.  The balance of this linked account is deducted from your home loan when loan interest is calculated. It’s a good way to use any savings to get ahead with mortgage payments but the cash is still accessible.

How a mortgage offset account works

Fix your interest rate

If you’re keen to take advantage of the current low interest rates, you could fix your home loan for an agreed period. This means your interest rate won’t go up even if the interest rates do. It can also work the other way though, if interest rates go down, your fixed rate will stay the same.

Source: https://moneysmart.gov.au/

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