Top Tips to Pay Off Your Home Loan Faster

Imagine the incredible feeling of being mortgage-free earlier than you ever thought possible. In Australia, where the dream of homeownership is a shared ambition, the journey doesn’t end with just acquiring a home loan; it’s about how efficiently you can pay it off.

This article provides you with proven strategies to help you pay off your Australian home loan faster, potentially saving you significant amounts of money and time.

Tip #1 - Make Extra Repayments

The power of making extra repayments on your home loan cannot be overstated. By simply paying more than the minimum required amount, you can significantly reduce both your loan term and the total interest paid over the life of the loan.

For instance, let's consider a home loan of $400,000 at a 5% interest rate over 30 years. If you were to pay an additional $100 every month, you could save approximately $60,000 in interest and reduce your loan term by close to 5 years. This approach not only shortens your loan duration but also builds equity in your home faster.

Tip #2 - Utilise an Offset Account

An offset account is a savvy tool in your mortgage repayment toolkit. It’s essentially a savings or transaction account linked to your home loan, where the balance is offset daily against your loan balance. This reduces the amount of interest you're charged. For example, if you maintain a balance of $20,000 in your offset account against a $400,000 loan, you are effectively only charged interest on $380,000. Over time, this can lead to substantial savings in interest payments.

It's important not to confuse an offset account with a redraw account, which can significantly alter the tax outcomes for your property investment strategy. A redraw account allows you to draw out extra funds that you’ve paid into the loan account, however what you then utilise those funds for can alter the purpose of that portion of the loan.

Tip #3 - Consider Refinancing for a Better Rate

Refinancing your mortgage to secure a lower interest rate can be a game-changer. It involves transferring your current mortgage to a new one, often with better terms and a lower rate. For example, if you were able to refinance your home loan from 5.5% to 5% on a $400,000 balance, you could save over $40,000 in interest over a 30-year period, reducing both your monthly payments and the total interest paid.

Reach out to your investment savvy mortgage broker and review your options, particularly if you’re an Australian expat. You may find that you have more choices of lenders than you originally thought possible.

Tip #4 - Switch to Fortnightly Payments

Opting for fortnightly instead of monthly repayments can subtly yet effectively reduce your loan term and the interest paid. By making payments every two weeks, you end up making the equivalent of one extra monthly payment each year. This can have a surprisingly significant impact; on a $400,000 loan at 5%, switching to fortnightly payments can save you around $50,000 in interest and reduce your loan term by over 5 years.

Surprisingly, by taking this a step further and switching to weekly repayments, you’ll often find that you can shave off slightly more time and interest when compared to fortnightly repayments.

Tip #5 - Lump Sum Payments

Making lump sum payments towards your mortgage whenever possible can drastically reduce the principal amount owed. Imagine using a tax return, bonus, or other windfall to make a one-off $10,000 payment on your $400,000 loan at 5%. This could reduce the total interest by approximately $28,000 and shorten the loan term by more than a year and a half.

Be sure to review if you’re on a fixed rate or a variable rate loan, as many fixed rate loans will penalise additional repayments that are made over a certain threshold, which can often by $10,000.

Tip #6 - Maintain Your Payments When Rates Fall

A clever strategy is to keep your repayment amount the same even when interest rates decrease. This means you're paying off more of the principal without any additional strain on your budget. If your monthly payment was $2,150 at a 5.5% interest rate and the rate drops to 5%, continuing to pay $2,150 can significantly accelerate your journey to being mortgage-free.

You may also decide to redirect the excess repayment amount into your offset account to allow yourself more choice and flexibility should your circumstances and overall strategy change.

Tip #7 - Budgeting and Cutting Back on Expenses

Budgeting effectively to prioritise your mortgage can have a dramatic effect. By identifying and reducing non-essential expenses like dining out, subscriptions, or luxury items, you can redirect those funds towards your home loan. Even an extra $50 a week towards your mortgage can translate into massive savings over the term of your loan.

Tip #8 - Review and Adjust Regularly

Regular reviews of your mortgage and financial strategy are crucial. As your income or life circumstances change, so should your approach to paying off your home loan. Regular check-ins ensure you are always employing the most efficient strategy for your current situation.


Paying off your home loan faster is not just about saving money on interest; it’s about achieving financial freedom sooner. The strategies outlined here can make a significant difference in reducing both your loan term and the total interest paid. Remember, the journey to owning your home outright starts with a single step, and even small changes can yield big results over time. So start implementing these tips today and take control of your financial future.


Embark on your property investment journey with Ally Property Group, your trusted ally in Australia's real estate market. Our expert advisers are dedicated to crafting personalised investment strategies for Australian expats and residents alike, aiming to enhance your portfolio and maximise returns. Start building your wealth with Ally Property Group, where strategic insights, analysis and modelling leads to prosperous investments.

We’re more than just property advisers. As Australian expats ourselves, we've navigated the intricate world of property investment both at home and abroad. With a legacy rooted in financial services, we offer a holistic, transparent, and strategic approach, ensuring you're equipped with the knowledge and confidence to make informed decisions.

Book an obligation-free, complimentary consultation here today.

General Information Warning: The information contained herein is of a general nature only and does not constitute in any way, personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional property investment advice specific to your circumstances.

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