• 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.

    Not available to companies or trusts. 

     

    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:

    The information here is of a general nature only and is not intended to constitute financial or tax advice. You should consult your professional adviser, accountant or taxation expert for advice specific to your personal circumstances.

    The views and opinions expressed in this article are those of the author alone and do not necessarily represent the views or opinions of RAMS Financial Group Pty Ltd ABN 30 105 207 538 (RAMS),  Westpac Banking Corporation ABN 33 007 457 141 (Westpac) or their related bodies corporate. This article is strictly for information purposes only and neither RAMS, Westpac nor any of their related bodies corporate make any representation as to the accuracy or completeness of the information in this article or endorse the views expressed in it.