How to save years off your home loan

August 01, 2016
Kyria Economidis

Save years off your home loan

Are you searching for ways to pay down your home loan sooner rather than later?  With these simple yet effective ideas can reduce years off your home loan without compromising your lifestyle


When interest rates begin to rise you can almost certainly bet your bottom dollar that personal loans and credit card rates will increase too!  The biggest advantage of combining your credit card and/ personal loan into your home loan is that you will save thousands of dollars in interest.   You could be paying as high as 18% in some cases so by consolidating your debt onto your home loan makes lots of sense


Many of us worry about an increase of interest rates and what that will mean for us financially.  A great option is fix a portion of the home loan, it’s always peace of mind knowing you have one fixed payment each fortnight/month. 

In the instance that rates do rise you have the flexibility to put extra payments onto the variable portion and pay that off sooner


One of the simplest yet effective strategies. Making mortgage payments fortnightly instead of monthly is a great way to reduce the loan term and overall cost. By moving your mortgage payments from monthly to fortnightly, you're actually making an additional payment each and every year. One extra repayment per annum might not seem like much, but over the life of the loan it really adds up.

For example, with a $500,000 loan at 5% for 30 years, making fortnightly instead of monthly payments could shave up to five years and a whopping $85,820 from your loan


Keep your payments the same when interest rates drop. Many mortgage holders lower their repayments when the interest rate drops, however a better approach is to keep your repayments the same.

By keeping the repayments the same, you'll pay off your home sooner and reduce the amount of interest paid in the long run.

For example, if the interest rate on your $500,000 30-year variable-rate loan drops to 4.5% from 5%, your monthly payments will change from $2,684 to $2,533. So, by keeping your payments the same, you’re effectively adding an extra $131 to your total monthly payment (or $1,572 a year). The bonus is that if you’ve been paying the same amount every month, you may not even notice it.

It pays to shop around and we’ll do it for you! Call us on

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The above information is general in nature. It has been prepared without taking into account your objectives, financial situation or needs.

Before acting on this information you should consider the appropriateness, having regards to your own objectives, financial situation and needs before making any decisions.

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