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  • Top 3 tips to pay off your home loan faster

    Top 3 tips to pay off your home loan faster

    Make sure your home loan allows you to exceed the minimum repayments, then use these simple tips to reduce the life of your loan.

    1. Pay fortnightly 

    By paying half your monthly repayment every fortnight, you take advantage of the 26 fortnights in a calendar year. This means you're effectively making an extra month's repayment across the year, and if you get paid fortnightly, you may not even notice!

    2. Open an offset1 account 

    You could reduce the amount of interest you pay by linking a transaction account to your eligible variable home loan. You might deposit your salary and any extra savings there. Any money in this account is offset daily against your outstanding loan balance, reducing the interest payable on the home loan.

    3. Pay extra 

    You may have the option to pay more than your required monthly repayment amount, in order to pay your mortgage off faster and build equity. When the opportunity arises, you can also make lump sum payments. A tax refund is an example of a lump sum that could form an extra repayment. 

     

    Note: whilst variable loans do not have a limit of how much you can over pay, there is a prepayment threshold (usually $30,000) for fixed rate loans that you cannot exceed without paying break costs, which can be significant.

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    About the author

    • Raymond

      Raymond A Ram is the RAMbassador for RAMS Financial Group. Raymond works with the RAMS team to bring simple, helpful and expert information on home loans and savings accounts to life with his down to earth and cheeky personality. He enjoys seeing everyday Australians turn their dreams of saving for a goal or getting into a home a reality. 

      Growing up in Goulburn, NSW, Raymond was brought up with good old-fashioned Aussie values of hard work and a fair go. It soon became apparent that Raymond wasn't content for the conventional path of grazing, producing the very best wool, and finding a nice sheep to settle down with. So it wasn't long before his passion for performing and his talent as a likeable larrikin shone through - landing him a few roles such as 'RAMlet'. He was even tipped to play RAM-bo at one point but chose to become star of the small screen instead as RAMbassador for RAMS. He now finds this role so much more rewarding.

      Contact your local RAMS Home Loan Centre about your home loan options.

      Raymond A Ram

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  • Disclaimer:

    This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.