Would you like to pay off your mortgage faster? With careful planning and dedication, you can wipe years off your home loan. Here we share our top five strategies that can save you thousands, and have you mortgage free sooner.
How to pay off your mortgage faster
1. Pay fortnightly
If you're currently making monthly payments, consider switching to fortnightly payments. By paying half of your monthly amount every two weeks, you'll effectively be making an additional month's payment each year, since there are 26 fortnights in a year.
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Before $400,000 Loan |
After $400,000 Loan |
2. Make extra repayments
Any extra repayment towards your mortgage can make a difference. You might consider setting up an additional re-occurring payment, or you might transfer a lump-sum from a bonus or tax return. Ask your lender if there's a fee for making extra repayments.
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Before $400,000 Loan |
After $400,000 Loan |
3. Have a budget
Having an effective budget plan is the best way to track your spending. This may allow you to find areas to save money, or even better - additional cash to put into your mortgage. If you don't have a budget, you can download our budget planner here.
4. Lower interest rate
Chat to a mortgage broker or shop around to compare interest rates. If you find a better rate, ask your current lender to match it or consider switching to a new lender. Just make sure the benefits outweigh any fees you may need to pay. If you secure a lower interest rate, keep making the same repayments you had at the higher rate.|
Before $400,000 Loan |
After $400,000 Loan |
5. Offset accounts
An offset account is a savings or transaction account that's linked to your home loan. Any funds in this account will offset the interest you have to pay. For example, if you have a $400,000 mortgage with $20,000 in your offset account - you're only charged interest based on the amount of $380,000.
Quick mortgage tips
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We can help
We hope you found these tips helpful. If you require further assistance with your home loan, our lending specialists at Simplii Finance can help. Contact us to arrange your free consultation.Want to know more? Get your hands on our free info pack!