3 tips to cut years off your home loan

December 04, 2017
Caroline Jean-Baptiste

When it comes to financial commitments, your mortgage is probably the biggest one you’ll ever make, so you need to make it work for you. And it's a great idea to get it paid off as soon as you can so you can kick back, relax and enjoy life mortgage free – or you put it to work and leverage to buy an investment property.

Whatever you choose, here’s three tips to help you pay off your loan faster:

  1. Pick the right loan 
    Putting in a little extra effort at the start, making sure you know your options, know the costs, know the rates, the features and the benefits – it pays off. There are no surprises if you’ve done your homework. Sometimes you need a little flexibility, sometimes you just need a great rate. Whatever you need, make sure you ask the questions at the beginning. 
    Having the loan to match your needs both now and in the future, will save you costs from changing loans or lenders in the future. Utilising an offset account will help reduce interest payable – and, in effect, shorten the life of the loan.
    We will make sure you know your options and can point out the pros and cons of each type of loan.
  2. Have an offset account and use it!
    Having money sitting in your offset account will reduce the interest payable on your loan as, although interest is charged monthly, it’s calculated daily. So if you have your salary paid into your offset account and just withdraw as you need it, you will pay the debt off faster.
    It’s also a great idea to plan to leave a certain percentage of your salary in the account after every pay if it’s at all possible. Even if it’s just 5% – it all makes a difference – and you can withdraw it if you do need it.
  3. Pay your bills with your credit card
    If you have your salary paid into your offset account, which is calculating interest daily based on the debt that’s been reduced by your salary deposit; and then if you pay for everything using your credit card, you can save money by paying your credit card off after you’ve made your mortgage repayment.
    There’s a couple of secrets to really make it work for you… firstly make sure the credit limit is within your budget. ie if you’re paid $6,000 a month and your mortgage repayment is $2,000, you’ve got $4,000 left over - so make sure your credit limit is under $4,000. Secondly, plan to save! Using the figures above, if you reduce your credit limit to $3,500, you’ll be able to pay the debt off monthly from your salary, and you’ll be saving $500 every month and reducing the interest payable on your loan by leaving that $500 in your offset account – so you’re winning on all counts and you will have saved $6,000 in a year!


The best way to pay your home loan off faster is to have a plan and stick to it. Using these three simple tips, you won't even be compromising your cashflow or lifestyle.

That's what we like! Call me if you want to discuss your home loan plans.

07 3366 8604

Caroline Jean-Baptiste - Mortgage Broker in Fortitude Valley, servicing New Farm, Spring Hill, Newstead, Teneriffe and all of Greater Brisbane.



Posted in: Home loans

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