Four ways to clear your mortgage faster
A home loan is the biggest interest bill most people ever face, and because interest compounds daily on the balance, anything that gets the balance down sooner pays off twice over. None of these moves require earning more — just repaying a little differently.
1. Extra repayments
Every dollar above your minimum comes straight off the principal, so you stop paying interest on it for the rest of the loan. Even a modest amount each month, kept up over years, can bring your payoff date forward dramatically — try nudging the "extra" field above and watch the chart.
2. Switch monthly to fortnightly
This is the quiet trick. There are 12 months but 26 fortnights in a year. If you pay half your monthly repayment every fortnight, you make the equivalent of 13 monthly payments a year instead of 12 — an extra month's worth, almost without noticing. On a typical loan that alone can cut several years and tens of thousands in interest.
3. Use an offset account
Money in an offset account reduces the balance you're charged interest on, dollar for dollar, while staying available to you. Parking your savings and salary there is one of the most efficient things you can do — it's like earning your mortgage rate, tax-free, without locking the money away.
4. Throw lump sums at it
A tax refund, bonus or inheritance applied to the principal early has an outsized effect, because it removes interest for every year that follows. The earlier in the loan, the bigger the impact.
How we calculate this
- We work out your minimum repayment from your balance, rate and years remaining, then simulate the loan period by period.
- Your current plan is the minimum monthly repayment to the end of the term; your faster plan adds your chosen frequency, extra repayments, offset and lump sum.
- The difference is your interest saved and the time you cut off — shown on the chart as two balance curves.