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How to take 5 years off your mortgage


A mortgage is such a big commitment and it can feel like you are paying it off forever.  While they are a 30-year term, your mortgage doesn’t need to be a lifelong debt. Instead, with a few simple changes, you can easily knock 5 years off your mortgage and save thousands of dollars too.

1. Make more frequent payments

Generally, your mortgage will be set to monthly payments. But if you set it to weekly or fortnightly you could pay less interest. Some banks set the fortnightly payments to simply be half of your monthly payment paid every two weeks.  This means you will actually pay a whole extra monthly payment each year.  When you split the 52 weeks a year into 4 weekly blocks as most do for a month, you actually get 13 months or 13 x 4-week blocks. Hence, the extra payment. On top of that, when you’re paying fortnightly or weekly, it reduces the interest you pay. It might seem minimal at first, but over time it will add up. Depending on the size of your mortgage, this change alone can save you 5 years.

2. Make extra payments

If you put your tax return, work bonuses, overtime or any extra money you get onto your mortgage it can make a big difference.  The sooner you do it, the bigger an impact it will have. For example, if you have a $350,000 home loan at 4.5% interest, if you start paying an extra $100 a week you can take 3 years off your loan.  A lump sum of $5000 in the same scenario can save 10 months.  With a couple of lump sums and paying extra each week, you can knock 5 years off easily.

3. Use an offset account and/or redraw facility

With an offset account, any money sitting in it reduces the interest you pay on your loan. By having your pay go into it and any other income, this money starts working for you, reducing your interest immediately.  With a redraw facility, you can place the money in there to use later. For example, if you pay your registration, insurance or other bills annually, keep the money in your mortgage then redraw it annually as needed.  This way you reduce the interest and pay extra off without any change to your budget.

4. Refinance

When was the last time you checked your mortgage to make sure you had the one which suits your needs? Interest rates change, you might have been on an introductory rate or maybe you want to decide if fixed or variable is right for you.  Along with rate changes, the benefits and options from various lenders change as well. Book a time to review your mortgage, compare your options and refinance if necessary.  The average Australian can save up to $3,000 a year and if that money is redirected into the mortgage, it can save years!

None of these tips require huge changes but they can save you years and thousands of dollars.  Just think, what could you do if you were mortgage free sooner?  Take that holiday, invest in other property, buy shares, get that boat you’ve always wanted, the options are endless.  You might also like to check out our 10 tips for paying off your mortgage sooner.


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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

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