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3 Clever ways to pay off your home loan faster

Small changes now may not mean much to you on its own, but for the long term it will make a huge difference.

If you’ve recently had a home loan approved or are already some way into your repayments, you may be thinking about how you can pay it off sooner rather than later. We will explore some clever ways to shave interest and time off your mortgage.

*Please note that the examples provided are indicative only, and outcomes assume that interest rates will not change and that all repayments are made on time.

1. Increase your repayment frequency

Consider making fortnightly or even weekly repayments instead of monthly.

By choosing fortnightly repayments you'll pay half of your monthly repayments each fortnight. Since there are 26 fortnights every year, this is equivalent to making an extra month's payment each year. This means you'll build equity in your home more quickly, plus pay off your loan sooner and save on interest.


Billy’s monthly home loan repayment amount is $2,691 on a $500,000 loan with a loan term of 30 years (at a fixed rate of 4.99% p.a.). Paying monthly, Billy will pay a total of $32,292 in one year ($2,691 x 12).

He decides to pay fortnightly instead, so his repayments become $1,345.50 per fortnight ($2,691 / 2). After 26 fortnights in that year, Billy pays a total of $34,983 ($1,345.50 x 26), which is equivalent to an extra month's repayment.

With these additional repayments each year, he'll be able to pay off his loan four and a half years sooner as well as save more than $80,000 in interest.

* Source: ASIC MoneySmart mortgage calculator

2. Increase your regular repayment amount

Paying more than your required repayment amount is another way to reach your home ownership goal sooner.


Billy decides to contribute an extra $50 a week or $216 a month (($50 X 52) / 12) on top of his $2,692 monthly home loan repayment, paying $2,909 each month.

This will shave four and a half years off Billy's 30 year loan term as well as save him over $80,000 in interest.

* Source: ASIC MoneySmart mortgage calculator

3. Increase your regular repayment amount AND frequency

Consider the first example where Billy chooses to pay fortnightly rather than monthly, and is now paying a required minimum repayment of $1,345.50 per fortnight.

Billy also decides, as per the second example, to increase his repayments by $100 per fortnight to $1,445. If he maintains this over the years he'll end up paying off his loan almost eight years earlier, saving more than $140,000 in interest.

* Source: ASIC MoneySmart mortgage calculator

Considering these small changes with the mortgage repayments we were able to save more than $140,000 and over 8 years from the original 30 year loan term. Imagine how much more time and interest we can reduce if we were to increase the repayments even more.

Explore your options today by calling Certified Lending on 0433 590 621 and let us guide you through the process.

"Disclaimer: Your full financial situation would need to be reviewed prior to acceptance of any offer or product"


PO BOX 5093

Cairnlea VIC 3023

0433 590 621

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