Most mortgage terms run for a maximum of 30 years. While convenient to stick with standard repayments over the full term, there are some easy things you can do to pay your loan off quicker and be mortgage-free.
Here are 5 tips any home owner can use to shave years off their mortgage.
1. Shop around for a better interest rate
Many people believe that staying loyal to a big bank will score them brownie points on their home loan rate. This isn’t necessarily true. There are many non-major banks and non-bank lenders that will often lend to you on a far better rate.
Switching to a smaller lender could net you a huge saving on your interest rate and your repayments!
Reduce Home Loans offers award-winning home loans at highly competitive rates online. Find out how much you could save on an average loan size of $420,000 over a 25 year term:
Owner Occupied Rate Buster High Lend | 3.49%p.a.* Variable & Comparison Rate
2. Use a 100% offset account to pay less in interest
Offset accounts are a great loan feature that can help you repay your loan quicker. The amount of savings held in a 100% offset account reduces the loan amount that interest is payable on.
For example, someone with a $200,000 loan has $50,000 of savings in their linked offset account. This means they only pay interest on $150,000 of the full loan amount.
Find out more about how offset accounts work and see how much you could save with an offset linked to your home loan.
3. Make extra repayments whenever you can
Making extra repayments toward your loan is a sure way to pay it quicker. Whether they be lump sum payments or a regular amount, every cent counts. By a rule of thumb, most variable rate home loans allow unlimited extra repayments per annum.
Fixed rate loans can be a bit more restrictive; most lenders have a cap on extra repayments payable per annum. Once your fixed rate expires and reverts to variable, then standard variable rate conditions apply.
Check out how much you could save with regular extra repayments on your mortgage.
4. Stay on Principal & Interest repayments
Opt for Principal & Interest (P&I) repayments over Interest Only if you want to repay off the loan quicker than the standard term. Repaying on Interest Only terms may seem great for your immediate budget, but the principal loan amount isn’t being repaid.
Also keep in mind interest rates on Interest Only repayment terms tend to be higher than P&I rates. Paying P&I on a lower rate will definitely help you in the long run. See the difference in repayments on your mortgage between repayment terms.

5. Use salary crediting
Salary crediting (also known as salary sacrificing) means your mortgage repayments are made directly from your pre-tax income. This is a great feature to use if your lender and employer allow it.
The advantage is you pay less in tax once the loan payment has been made. Therefore your taxable income is less, and you end up paying more on your mortgage and less in tax.
It also serves as a convenient set-and-forget repayment feature so you don’t have to stress about repaying your loan out of your own post-tax pocket.
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