Ask any prospective homeowner what their biggest concern is about buying property. Chances are, it’s the commitment. You can never foresee the future and locking yourself into paying back a loan that’ll last decades can be overwhelming.

But this shouldn’t stop you from letting yourself dream about owning a home. Just because your mortgage is for 30 years, it doesn’t mean it’ll take you this long to pay off. Use this 30 years as a ‘worst case’ scenario.

There are many factors that affect how quickly you pay it off, such as how much you earn and if you have any children. Let’s go through our top strategies for paying off your home faster.

Top Mortgage Repayment Tips

#1: Increase your repayments

The simplest (and most obvious) way to own your home sooner is to increase your monthly repayments. Putting in extra money not only reduces your mortgage term, but will also save a substantial amount in interest. It doesn’t have to be large chunks either, but rather small, consistent repayments in addition to your regular amounts. 

Regular bills that are forever are crippling to your savings. For example a subscription to broadband, this is a forever bill. Keep an eye on these and really see if you can save yourself some money by dropping some of these luxury items. The same goes for the coffees and eating out, these are small payments, but every week it adds up. $5 per day on coffee is $1,825 per year, which on a 30 year mortgage, with a $450,000 loan at 4.5%, if paid off the loan, reduces the length of the loan by 3 years and 5 months and saves you a massive $46,638 in interest! Think about that the next time you buy a coffee!

Do a search for a mortgage repayment calculator with extra repayments and see how it would affect your mortgage.

#2: Hunt for better loan products

You should always be on the lookout for other home loan products on the market – regardless of how long you’ve had your loan for. You might find a lender offering more competitive options that could save you thousands. Don’t feel like you’re locked into the one lender, forever. No, you should have your eyes and ears open at all times.

Also, if you see a better rate at another bank, give your current lender a call and ask them to match the competing rate. This is an easy option as a first step and quite often the lender will match the rates or reduce yours enough not to have to go through the hassle of moving lenders.

#3: Avoid 'special' rates

If you do change loans or refinance, be wary of deals such as honeymoon rates. Although they seem ideal, most often once the introductory period finishes, you’ll pay more than most loans. Think long term and always be aware of what the loan will cost you over the next 20-30 years.

$5 per day on coffee is $1,825 per year, which on a 30 year mortgage, with a $450,000 loan at 4.5%, if paid off the loan, reduces the length of the loan by 3 years and 5 months and saves you a massive $46,638 in interest! Think about that the next time you buy a coffee!

#4: Open an off-set account

This is a little strategy with big payoffs. An offset account is an effective money-saving feature and various lenders pair this with their home loan products. It works by acting as a transactional account that’s linked to your mortgage. Say you deposit extra funds into it, it’ll decrease the loan balance that interest is calculated on. This way, you’ll pay less interest but also still have the flexibility of withdrawing the money to use for other needs. The best-case scenario, however, is to keep the funds in the offset account and check if the lender charges withdrawal fees.

Quite a few people will place all their wages and savings into an off-set account, and use this account for paying all your bills and managing your budget. Then transfer a fixed amount of ‘spending money’ to another account every week. This maximises the off-set account, keeps all your bills paid and prevents you from spending what you don’t have.

#5: Check your repayment frequency

The frequency of your repayments also affects how long it’ll take to pay off your mortgage. For example, some fortnightly repayments are calculated by dividing the monthly repayment in half and then repaying every two weeks. By doing this, you end up paying the equivalent of one extra monthly repayment each year. Check with how your lender works out the repayments, as their method may be different and you may end up repaying the same amount, no matter what your frequency is. Bring this up with your lender.

There’s plenty of other strategies you can implement to live mortgage-free – such as put those big one-off chunks of money (like your work bonus and tax return) into the mortgage, and avoiding taking on more debt. Ask yourself whether you really need Foxtel or that extra credit card. Get as financially healthy as possible. Kick those bad habits.

#6: Pay off your bad debts

Credit cards are lethal, easy to spend and hard to repay. If you have multiple credit cards and they are near maximum then you must get these repaid first. These blood suckers erode your ability to repay anything off your home loan. I understand how hard it is to repay these, my personal experience was to pick the lowest debt card, for example if you have a $3,000, a $5,000 and a $10,000 cards then start with the $3,000 card. First of all you have to cut up the card so you cannot use it again. Then start by paying the minimum monthly repayment, maybe $80, plus some extra, maybe $20, however little that is off that one card. Work it our on spreadsheet if it’s easier, but plan how long it’s going to take to replay that credit card, it might take a year or more but that’s okay. Once that card is repaid, then start paying that amount, say $100, off the next card plus continue paying the minimum.

It will be hard at first, but getting these paid off will be a massive relief to your financial stress levels. I would also recommend getting a Debit Card and leave the credit cards, never use them.

The only time to use credit cards is when you don’t need them, you can have your bills paid from a credit card which gives you 56 days to pay the card. Meanwhile your money remains in your off-set account giving you an extra 56 days interest free off your mortgage.

Disclaimer: I am not a wealth advisor, the opinions and ideas I have given are my own and from my life experiences. Please use your own common sense, talk to your accountant, mortgage broker, bank etc. 

Credit cards are lethal, easy to spend and hard to repay. If you have multiple credit cards and they are near maximum then you must get these repaid first. These blood suckers erode your ability to repay anything off your home loan.