The start of 2024 has been challenging for a lot of mortgage holders. Research from Roy Morgan shows that 1,629,000 mortgage holders (that’s 31.4%!) were a risk for mortgage stress as at February 2024.

So, there’s no better time than now to start paying off your home loan! And every dollar you pay now, not only brings down the overall principal, but lowers the timeline of the loan overall. That means that you’ll pay less interest in the long run as well.

So how can you pay off your home loan faster?

How can I pay off my home loan faster?

Here are our tips to help you pay off your home loan in record time.

Increase your payment amounts

Increasing your regular payments is the most simple and straightforward way to pay off your home loan faster. But of course, this is often easier said than done.

Commbank gives an excellent example of how this can work so well in your favour, compounding the worth of each dollar you pay off earlier to your benefit.

Source: Commbank

The same results occur regardless of the lender. The more you pay, and the more quickly you pay it, the faster you’ll pay off your loan overall.

Make bulk payments from any windfalls

One fantastic way to get more money onto your home loan is to make extra repayments. Whenever you get a bit of a windfall – whether that’s a tax return, an end-of-year bonus, a gift from a family member or an inheritance, for example – consider putting these towards your home loan repayments.

Make extra repayments part of your routine

Making extra repayments can cut your mortgage down by years. Rather than paying once a month, consider paying every four weeks. This works very well if you’re on fortnightly pay and will let you squeeze in an extra month’s payment every year. And it is likely you won’t even notice!

You should always check with your lender to see if there’s a fee for making extra repayments.

Consider an offset account

An offset account is an excellent way to reduce the amount of interest you pay on your home loan and pay it off faster. An offset account is pretty similar to a regular savings account. You’ll have a debit card and can make deposits and withdrawals just like a regular account.

But unlike your regular savings accounts, offset accounts are directly linked to your home loan. And all the amounts you hold in your account reduce the amount that you owe on your home loan by reducing the interest you pay.

Get a lower interest rate

Getting a lower interest rate is one of the best ways to pay off your home loan faster. One great way to do this is to reach out to your current lender (or ask your mortgage broker to do it!). You can ask them to match better rates that are in the market generally, or to move you to one of their special introductory rates. This approach works more often than you might think!

You can also look to switch lenders who might offer a more competitive rate. Refinancing is always a great option but be sure that you also consider the length of the home loan and any fees you might incur in making the switch. If you get a better interest rate, but you aren’t going to be able to pay the loan off faster, or any advantages are swept away by increased fees, it might not be worth it in the long run.

Again, your mortgage broker can help you find the best solution for you!

Look at ways to save

If you’re able to save money in your regular life, and put this towards your home loan, you’ll be able to pay it off faster. It can be hard to focus on savings, but small changes can have a big impact. And every dollar you put towards your home loan now, is a lot more saved in the future.

Read more: 5 ways to save money this year and feel good doing it!

Speak to your mortgage broker!

There’s no one better to help you on your path to paying off your home loan faster than your expert mortgage broker. Our Lending Loop team is on hand to answer all your questions, give you advice and see you on the path to a faster and easier repayment process. Having a mortgage free home is well within your grasp!