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[MoreMore Insights] How to pay off my home loan faster?

1. Pay extra on your regular repayment amount It is an easy way to pay off your home loan faster by paying a little more than your required regular repayment amount. The extra payments don’t need to be much, even the smallest extra payment can contribute a lot to your mortgage. Putting a work bonus or tax refund into your mortgage is a good way to help you save interests. Besides, making extra payments now will benefit you if the interest rates rise in the future. However, pay attention to whether you are allowed to make extra repayments because there may exist some limits for the fixed interest rate loan.

2. Stay informed for the mortgage Loans lasting for decades sometimes will be forgotten by the borrowers because people want to put the stress behind themselves. Thus, they probably make the repayments as due dates approaching, which is a bad habit. The attitude towards the loan is a big deal, so keep current on what’s happening in the mortgage market and make repayments on time. Then it is possible to find some latest opportunities to help you stay ahead of the game. For instance, you keep a close eye on the interest rate and notice it falls, then you could be the first to take actions.

3. Set up an offset account An offset account is a bank account that is linked to your home loan. The offset account can help you pay less interest on your home loan, reduce the time it takes to pay off your loan. The money in the offset account will not be frozen. Considering offset account as a daily transaction account and depositing salary regularly into the account is a good choice to pay off the loan sooner.

4. Make more frequent payments Make repayments more frequently is another way to pay off the loan faster. People who pay monthly now should consider switching to fortnightly or weekly repayments. Frequent repayments mean that you actually paying more money compared to the infrequent ones. In this way, the loan can be paid off faster. Making repayments monthly and adding some extra payments have the same effect. 5. Find a lower interest rate Search some similar loans which have the same features you want to keep with your current home loan and then compare the interest rate. Once you find a better deal, ask your current lender if you can switch to that interest rate or a cheaper choice compared to the current one. If you decide to switch to another lender, make sure the fees charged for closing the current loan and applying for a new one would not exceed the benefits you can get. 6. Think carefully about choosing an interest-only loan The interest-only loan is not a good idea for home loan borrowers. Holding an interest-only loan means you will not actually pay off the loan because you only pay the interests during the set period, and the principal does not go down. 7. Know your entitlements Specific professionals like doctors, accountants, lawyers can probably get discounts from some lenders. For instance, some lenders will waive Lenders Mortgage Insurance (LMI) for a doctor with a certified medical professional, which means the doctor needn’t pay LMI even if he or she borrows more than 80% of the property value. Or the lenders can lend at a higher loan to value ratio before asking for LMI. If you are a professional with a specific entitlement, don’t hesitate to take advantage of that for paying off your home loan faster!

8. Check up your loan regularly Checking financial health at least once every year is important to every loan owner. Because it is a good way to make sure your home loan is still the right product for you. And reviewing loan regularly is crucial for exploring some better deals. You can potentially shorten the period of your loan if you find a better deal at the earliest time.

9. Don't be afraid of smaller lenders with cheap rates

There was much talk about smaller non-traditional lenders and how they affect the interest rate in the past few years. As the property market becoming popular, many non-traditional lenders who accept low fees come up and do well compared to the traditional lenders. Borrowers may be worried about the credibility of small lenders. But it’s fine because you already got the money, so don’t worry too much. Some small lenders may sound unfamiliar to us but it’s worth contacting them if there is a low-interest rate.

10. Contact us! MoreMore Finance is a professional financial company with extensive mortgage broking experience. We will devote ourselves to look for the best financial plan for you and shorten your home loan lifespan with our best effort. Contact us now to make an enquiry. Let us help you to save more, borrow more!

Want to contact us today?

Please call at 1300 613 883 for a free-cost consultation.

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