One of the most common questions we get at Lending Association is, “How do I pay off my mortgage faster?”
It’s a great question – and the good news is, there are tried and tested strategies that can help you get ahead financially. Reducing your loan term by even a few years can save you tens of thousands of dollars in interest and bring you closer to financial freedom. Whether you’re just starting your home loan journey or have been paying it off for a while, it’s never too early (or too late) to take action.
1. Make Extra Repayments (Even Small Ones Count)
One of the simplest ways to pay off your mortgage faster is by making extra repayments. Every dollar you put towards your loan beyond the minimum required repayment goes directly towards reducing your principal, which means you will pay less interest over time.
Let’s break it down with an example:
If you have a $500,000 home loan over 30 years with a 6% interest rate, and you pay an extra $200 a month, you could shave more than 5 years off your loan and save over $100,000 in interest.
The best part? Many loans (especially variable rate ones) allow additional repayments without penalty. Even rounding up your repayments or making fortnightly instead of monthly payments can make a big difference over time.
2. Use an Offset Account Effectively
If you’re not already using an offset account, it could be a game changer. An offset account is a transaction account linked to your home loan. The balance in this account is offset daily against your home loan balance, reducing the amount of interest charged.
For example, if you have a $500,000 mortgage and $20,000 sitting in your offset account, you’ll only be charged interest on $480,000.
Unlike paying extra directly into your mortgage, your money in an offset account remains accessible – giving you flexibility without sacrificing your ability to reduce interest.
Tip: Keep your salary and savings in your offset account for as long as possible before paying bills. This maximises the daily balance and minimises interest.
3. Structure Your Loan Smarter
Your loan structure can make a massive difference when it comes to paying off your mortgage faster. There’s no one-size-fits-all answer – what works for one person may not be ideal for another.
Some smart structuring options include:
● Splitting your loan between fixed and variable portions for flexibility and certainty
● Choosing principal and interest repayments rather than interest-only
● Setting up automatic extra repayments to match pay cycles
● Reviewing your repayment frequency to ensure it aligns with your income
At Lending Association, we work with you to design a loan structure that suits your lifestyle, cash flow, and long-term goals.
4. Refinance at the Right Time
Refinancing can be one of the most powerful strategies to help pay off your mortgage faster – if done at the right time. Interest rates, lender fees and product features vary greatly between lenders, and what was a good deal five years ago might not be competitive today.
When you refinance, you may:
● Access a lower interest rate
● Switch to a loan with fewer fees or better features
● Unlock equity to invest or consolidate other debts
● Reduce your loan term
Even a 0.5% drop in your interest rate can translate to thousands in savings annually. However, refinancing isn’t just about chasing the lowest rate – it’s about ensuring your loan is working for you.
Our expert brokers at Lending Association compare hundreds of loans across the market to find the right one for your needs.
The Power of Combining Strategies
Want to know how to pay off your mortgage faster and smarter? Combine the strategies above:
● Use your offset account daily
● Make extra repayments consistently
● Set up a smarter loan structure
● Review and refinance every few years
Together, these actions can significantly reduce your interest burden and give you a faster path to outright home ownership.
Why Personalised Advice Matters
While these strategies are proven, everyone’s financial situation is different. What works for a young couple buying their first home may not work for a self-employed investor or a family juggling multiple debts.
That’s where we come in.
At Lending Association, we take the time to understand your goals, your income, your lifestyle, and your long-term financial vision. Then, we tailor a mortgage solution to help you get ahead – faster.
Ready to Start Paying Off Your Mortgage Faster?
The sooner you take action, the sooner you’ll see results. Whether you want to make extra repayments, explore refinancing, or review your loan structure, we’re here to help.
Call the Lending Association team today and let’s talk about how we can help you shave years off your home loan.
Make a time that suits you.
Call: 02 8935 1111
Email: concierge@thelagroup.com.au
