Our response to limit the spread of COVID-19 | Read here

10 tips to pay off your home loan faster

Many people chip away at their home loan on autopilot. But with a more proactive approach, you can shave years off your loan and save thousands in interest repayments. Below are 10 ideas to help you pay your loan off faster. Pick the ones that appeal the most to you and feel free to contact us if you have any questions.

Get a cheaper rate

With the recent drop in the official interest rate, it’s a great time to get in touch with your broker to check if your current rate stacks up with what is being offered in the market. If you decide to refinance, don’t adjust to the new, lower repayments. If you keep your repayments the same, you’ll find that over time your loan will reduce at a faster rate. On average, this move can save five years off your loan.

Consolidate your debt

It’s relatively common for people to have either a car loan, personal loan or even some credit card debt. Chances are you’re paying more in interest on these loans than what you are on your home loan, often up to 20 percent or more. If you have a home loan and available equity, it can therefore be a really good idea to use an increase in your loan to pay off and consolidate all your other high-interest debts.  When you do consolidate your debts, just make sure you put the money you’re saving every month back into paying off your home loan rather than spending it!  That way, you’ll be paying more of your principal debt, and over time, less in interest.

Don’t ‘put it on the house’

There are numerous advertisements around saying that you can use the equity in your home to purchase a new car or take a holiday. Do not be tempted to do this. If you wish to purchase a big ticket item, set your budget and open up another account (if possible make it an offset account) to save money into.  That way, you get that new car or holiday, and your home loan is still on track to being paid off. Continuously borrowing from your home to buy things could leave you still in debt in 20 or more years down the track.

Keep your cash in an offset account

With most variable loans, it’s likely that you’ll have a redraw account and offset account. Make sure that you keep as much of your cash in one of these accounts as they offset your interest, helping you to pay your loan off sooner. Don’t keep separate accounts for holidays, the kids or a rainy day, get it all working to reduce your interest. If you need multiple accounts to help manage your cash flow and savings, choose a loan that allows multiple offset accounts.

Pay off the loans costing you the most first

Do you have an investment loan as well as a home loan? Make sure you’re paying off your most expensive loan first. Be careful though, because the loan with the highest interest rate may not be the most expensive. If you have borrowed money for investment purposes, it’s possible that the loan is tax deductible, meaning the ATO is paying for part of your interest. If that is the case, it’s likely your non-tax deductible debt is more expensive and should be paid off first.

If you’re expecting, start living off a single income

If you’re expecting a child soon, it’s likely your income will drop for a period of time.  Get used to living off a single income now. Use the money earned from the second income up until the baby arrives to get your debt down. By the time you go on maternity or paternity leave, you’ll have less debt and be used to living off one income.

Review fees and charges

You may be surprised to know that banks are often flexible with the fees that they charge, so it’s worth seeing what you can negotiate or restructure.  While a saving of $10 per month may not sound like much, on a 25 year home loan this saving adds up to $7,779.

Try and pay cash for renovations

Rather than take out a loan for improvements or repairs on your property, why not set a savings goal? If you want a new kitchen that is going to cost $24,000, how about you try and find an extra $1,000 per month over two years and save up? Rather than having a home loan that is $24,000 higher, you’ll have the same level of debt and be well on your way to paying your loan off sooner.

Go hard, go fast

So you’ve just moved into your new home or put a tenant into your investment property – it’s time to celebrate a major milestone in your financial life! But once the celebrations are over, know that the more you pay off your loan in those early years will have an exponential impact on how long it will take to pay your debt off. If you’re buying your first home and expect to have children within the next few years, now is the time to go hard and make a dent in your loan.

Don’t be complacent

Everything in life takes effort, and your home loan is no exception. Keep hassling your mortgage broker every year if they know of a better rate (in truth, they should be calling you, but not all brokers are created equal). Call your bank and see if they can shave the rate. Consider using a home loan linked credit card instead of one where you’re paying an annual fee. Chances are you’ll find ways to save a few hundred dollars or possibly more. If you consider the impact of this over a 25-year time frame, it will make a significant difference.

You may also like

How to live off a single income

Whether you’re going on maternity leave, looking after elderly parents or pursuing your own business, a little bit of planning before dropping to a single income will go a long way. Here are some ideas to help make the transition smoother.

Read more

How to invest in property if you can’t afford a house

Owning a home is the great Australian dream. But what can you do if you can’t afford a house? Find out your investment options.

Read more
Talk to us


We’re so confident about creating value for you quickly, that we guarantee it with a 100% money-back guarantee.

Call us for a free strategy session

Arrange a call back

  • This field is for validation purposes and should be left unchanged.
Untitled-2 Untitled-2

Arrange a call back

  • This field is for validation purposes and should be left unchanged.

Our response to limit the spread of COVID-19

  • As COVID-19 continues to spread, we would like to take a moment to let you know what Financial Spectrum is doing to respond.

    While we haven’t been directly affected with any confirmed cases, we are taking all reasonable precautions to remain safe.Our priorities are:

    1. Keep our staff and clients safe
    2. Stay fully operational in our service delivery and continuing to manage your financial affairs
    3. Play our part in minimising the impact on our community against the spread of COVID-19

    Financial Spectrum has the technology, infrastructure and systems to continue business as usual remotely and our staff will now be working from home.

  • You should notice no change to our service, with the exception that we are encouraging our clients to meet via video call, rather than face to face, unless requested. We will be contacting all clients with meetings booked over the next two weeks with instructions for a video call.This is an evolving situation and we will continue to monitor developments. We will keep you informed of any material changes to our approach.

    These are unprecedented times and we understand that many of you will be feeling unsettled about your finances. We would like to assure you that we are open for business and are here to help you. If you don’t have a meeting booked but would like one, or if you have questions, please contact us at info@financialspectrum.com.au or on
    02 8238 0888

Brenton Tong

Managing Director

Google Review

Google Rating


Looking for something?