Brighter Buying

#10 Ways to pay off your home loan in half the time

by Kate Watt, Marketing Manager 13 May 2021

There are no surprises here. If you want to live the dream of being debt free sooner you’ll need to get thrifty.

Here are #10 tips courtesy of Domain to downsize your mortgage while interest rates remain at historic lows.

Warning: some of these could hurt!

  1. If you double your repayments, you’ll halve your loan term – right? Wrong. If you increase your repayments by two-thirds you’ll pay off a 30 year loan in 15 years.
  2. Cut back the coffees. Yep – there’s no escaping the fact that small costs add up to a big cost over time. Two $5 coffees a day equals $50 a week and more than $2500 a year – that’s an extra mortgage repayment or two.
  3. Review your home loan every three years to make sure you’re still getting the best interest rate. Find an independent broker to help weigh up fees and switching costs.
  4. Start with a smaller loan amount – not the maximum a bank will lend you – and try to put half your income into repayments. Most people put about a third of their income into repayments but with tight budgeting the super savers can typically pay more.
  5. Set up an offset account and make sure any spare cash you have sits in here to reduce the amount of interest you pay on your loan.
  6. Cut back on some of the big costs. Do you really need a mega screen TV or could you save a bit to put in your offset account, and reduce your home loan interest rate?
  7. Consider investing in another property for 10-15 years then take your cash out to pay off your home loan. Sounds tricky right? It is. You should seek independent financial advice to see if a strategy like this would work for you.
  8. Budget like a pro. Set up separate accounts for your different expenses and don’t take from one to pay the other.
  9. Don’t feel pressured to splash the cash on an Insta-worthy lifestyle. Find free things to enjoy – like a day at the beach – rather than spending hundreds or thousands on living luxe like an influencer.
  10. Find a side hustle to bring in extra cash, or rent a spare room – even get bold and ask for a pay rise. You deserve it!

Nailing your mortgage and ready to make your next property move? View our current listings for sale or talk to us about selling.