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It is possible to save thousands on your home loan just by making a few small changes. Take a look at our A-Z guide for ideas.

With the right strategy, it’s possible to cut years off your mortgage term and furthermore, save a significant amount of money on interest. But which strategy is right for you?

Avoid more debt

If you are determined to repay your mortgage early, then you need to keep other expenses to a minimum. Taking on more financial commitments such as personal loans, credit cards, phone contracts and pay TV means you will have less money to put towards your home loan.


Budgeting will be essential if you are going to put more money towards your mortgage repayments. If you are determined to put extra funds towards your home loan, you may need to eliminate some luxuries. For example, daily coffees, weekly takeaway meals and gym memberships all eat away at your income and there are possible cheaper alternatives that you can switch to.

Don’t redraw

Your home loan may allow you to pay  extra funds into it as well as withdraw it. However, the longer you can keep these funds in your loan, the less interest you will pay. Also, if your lender charges a fee every time you withdraw, you could end up wasting a lot of money on these fees. This is where budgeting and planning comes into play. If you are able to set aside an amount of money that regularly goes into the offset account and stays there, it could help you pay off your home loan a lot faster.

Extra Repayments

Making extra repayments is one of the best ways to pay off your home loan sooner. However, you will need to check that your mortgage allows you to make extra repayments. If you want to see how much time and interest you could save by making extra repayments, take a look at our online calculator (link).


Do you have both short term and long term financial and personal goals? These goals may affect how soon you are able to pay off your mortgage. For example, if you are in your 50’s and are starting to think about your plans for retirement, you may be eager to pay off you home loan quickly and therefore put more funds towards the repayments.

However, if you are in your mid 20’s and looking to start a family, you may not be able to put as much towards the repayments in order to cater for these other expenses.

Home loan buffer

Unfortunately, issues often pop up when you least expect it. Events such as an, illness with unexpected medical bills, car needing replacement or losing your job can cause financial stress for you and your family. This is why it is so important to have a backup plan for emergencies.

If you have been making extra repayments on your home loan and these funds are available to redraw, it can be extremely beneficial if you come across difficult times.

Increase Income

Getting a second job can help improve your financial situation and help you pay off your home loan faster. Even if you work an extra night or two a week, putting your income from this second job towards your home loan can help reduce the amount owing very quickly.

Kick bad money habits

There are certain habits you may have that you don’t even realise are hurting your finances. Some of these may include:

  • Using ATMs that are not from your financial institution: This incurs unnecessary ATM fees
  • Shopping without a list: A grocery list is extremely important to ensure you don’t overspend.
  • Not paying bills on time: If you regularly miss bills, you may be charged a late fee.

All of the extra money you spend on these habits could be avoided just by planning better and then this money can go towards your mortgage.

Lump sums

If you come into extra money, such as a work bonus, a gift or tax return, putting it towards your home loan can reduce the principal as well as the interest owing. If you weren’t expecting it then you might not even miss it!

Offset account

An offset account is a great home loan feature that can help you save on interest. An offset account is a transactional account that is linked to your home loan. You are able to deposit funds into this account and it will reduce the balance of your loan that interest is calculated on thus saving you interest. You can still withdraw the money when you need it for other expenses.


At certain times in your life interest only repayments are chosen to reduce your minimum monthly outlay. It could help give you some breathing space if, for example you were having a baby and had one income for a period of time. As soon as is practical remember to resume principle and interest repayments. Principal and Interest repayments are a structured way to pay off your home loan by locking away the principle you have paid so it can’t be withdrawn. If you need this discipline make sure you take advantage of it and use it to help you pay off your home loan.


If you regularly health check your mortgage and have found that there are other products available that might be more suitable for you, take action. Lenders are extremely competitive and if they see that you are looking to refinance, they will be eager to help you. However, if you are happy with your lender, but just want a more competitive loan, speak with them as they may be able to offer you a more suitable product in order to keep you. Remember to factor in the cost of refinancing and ensure that switching is worth it. Refinancing too often chasing the cheapest rate could be putting you further behind due to the costs involved.

Take advantage of low interest rates

As interest rates are currently at a record low, many Australians are taking advantage of this and are making larger repayments in order to pay off extra on their home loan.

This is also a great strategy in case interest rates change. If the rate goes up, it may not make a huge difference to you as you are already making larger repayments.

Upfront fees

Some lenders charge one-off fees such as application fees or Lenders Mortgage Insurance and give you the option of paying them up front or adding it to the amount owing. If it has been added to your loan, it does mean you will be paying interest on it and paying it off over the loan term. Try to increase your repayments initially to pay these extra amounts off as early in the loan as you can.


If you have an offset account linked to your mortgage, you may be able to have your wages deposited directly into that account. By doing this, then you can get it working for you, saving interest on your loan as soon as you are paid. Leave it there as long as you can and pay bills when they are due to give you maximum benefit. Getting your spare cash working for you