How To Pay Off Your Mortgage Sooner

By Andrew Johns

It’s the home-owner’s dream – to pay off the mortgage early and be free of the shackles of home loan repayments once and for all.

There are many strategies to pay off your mortgage faster and saving more money in interest in the long run. However, as with most financial decisions, we advise you to always consult with professionals to ensure that these strategies are right for you and your situation.

Here are some expert tips for you to get the ball rolling:

Tip 1: Find A Cheaper Interest Rate

“Shop around to find a home loan that offers a lower interest rate than your current loan. A loan that offers a honeymoon or introductory rate can be good but you need to check that it is right for you. The savings tend to be short-lived and once the honeymoon period ends, you could end up with a more expensive loan.” – ASIC Moneysmart


Tip 2: Make Repayments At A Higher Rate

“A good way to get ahead of your mortgage commitments is to pay it off as if you have a higher rate of interest. Get a loan at the lowest interest rate you can and add 2 or 3 points to your repayment amount. So if you have a loan at about 7 percent and pay it off at 10 per cent, you won’t even notice if rates go up. Best of all, you’ll be paying off your loan quicker and saving yourself a packet.” – Nila Sweeney, Your Mortgage Magazine


Tip 3: Switch To Bi-Weekly Payments

“Biweekly payments take advantage of the fact that there are 52 weeks in the year and 12 months. If you pay half your regular mortgage payment every other week, you’ll have made 26 half-payments, or the equivalent of 13 full monthly payments, at year’s end.” –

Not all mortgage providers will let you make fortnightly repayments, so check first (ideally before you take out your loan).


Tip 4: Review And Compare Regularly

“Your needs change, your income changes, as do home loan products and interest rates. Don’t leave your home loan paperwork to gather dust and slip into a routine of automatic debits that you forget about. Stay on top of what you’re paying and how you’re tracking.

Work with your mortgage provider to develop a system for regular health checks on your loan, asking if there are better interest rates, better deals, different products that better suit where you’re now versus when you took out the loan.

Good deals are out there, but you usually have to do some homework to find them. Don’t forget that there can be penalties for switching home loans – you’ll need to weigh that against any savings.” Venessa Paech,


Tip 5: Offset Your Loans With A Savings Account And Have Your Wages Paid Into The Offset Account

“This is where the amount in your savings account earns interest (ideally at the same rate as your mortgage repayment, in a 100% offset), and that amount is subtracted from the interest payable on your loan. For example, if your loan is $400,000 and you have $100,000 in savings, you only pay mortgage interest on $300,000. It can greatly reduce the amount of interest you pay and also save years on your home loan term.

If you get paid $5,000 a month and those funds sit in your offset account for a few extra days per month, you could save a few hundred dollars in interest every year. It doesn’t sound like much, but it all adds up. “This can actually greatly reduce the interest that you pay, as the interest is debited at the end of the month and usually calculated daily.” – Robert Projeski, Australian Mortgage Options

BONUS VIDEO: Scott Pape’s Pay Off Your Mortgage Faster Challenge.

Take Scott Pape’s money challenge to help you pay off mortgage faster to own your home.

Related Posts
How To Pay Off Your Mortgage Sooner