Owning your home outright is a dream for many Australians and paying off your mortgage faster can save you tens of thousands in interest and help you build financial freedom sooner.
But what are the strategies that actually work?
1. Make Weekly or Fortnightly Instead of Monthly Repayments (NOT taking Redraw and offset into consideration)
This is one of the easiest strategies to implement.
How it helps:
- Reducing Principal More Often
Most lenders calculate interest on a daily basis. By making repayments every two weeks instead of once a month, you’re reducing the loan principal more frequently. This means there’s less principal for interest to be charged on, and your interest costs reduce faster. - Compounding Effect Over Time
With each fortnightly repayment chipping away at your principal more regularly, the compounding interest effect works in your favour. Over time, this leads to a faster loan paydown and significant savings in interest.
2. Put Extra Money Toward Your Loan
Contribute any extra repayments, big or small will go directly toward your loan’s principal, reducing the amount of interest you pay.
Examples of when to make extra payments:
- Tax refunds
- Work bonuses
- Pay rises
- Side hustle income
- Even rounding up your repayments (e.g. paying $2,100 instead of $2,000)
Pro tip: Even an extra $50–$100 per month can make a huge difference over time.
3. Use an Offset Account Effectively
An offset account is one of the most powerful tools you can use to reduce interest and pay off your loan faster, without locking your money away.
How it works:
- The money in your offset account reduces the interest calculated on your loan.
- For example: If your home loan is $500,000 and you have $30,000 in your offset, you’ll only be charged interest on $470,000.
It’s like earning a return equal to your home loan interest rate.
Tip: Have your salary deposited directly into your offset and use a credit or debit card for expenses. Keep money in the account as long as possible to maximise your interest savings.
Disclaimer: Offset strategies work best when used with care. Always pay credit cards in full each month and seek personalised advice.
4. Review and Refinance When It Makes Sense
Over time, your home loan interest rate may become less competitive. Lenders often reserve the best rates for new customers which means you could be paying more than you need to.
What to look for:
- Are you still on the same rate you started with?
- Have your needs changed since taking out the loan?
- Are you eligible for cashback offers or lower rates elsewhere?
Tip: Reviewing your loan every 1–2 years and refinancing when suitable can help you:
- Reduce your interest rate
- Access better loan features
- Put more toward the principal, not interest
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5. Stay Focused on Your Goals
It sounds simple but being consistent and intentional makes all the difference. Treat your mortgage like a priority and stay mindful of the long-term goal: financial freedom.
A few mindset tips:
- Set reminders to review your loan annually
- Create a repayment plan that still fits your lifestyle
- Celebrate milestones along the way (like knocking off the first $50k!)
Final Thoughts
Paying off your mortgage faster doesn’t require massive sacrifices. With the right strategy and a few smart habits you can take years off your loan and save thousands in interest.
At Zodiac Finance, we help everyday Australians make smarter choices with their home loans. Whether you’re looking to refinance, restructure, or just explore your options, we’re here to help you plan with confidence.
Get in touch for a personalised mortgage review—let’s see how much faster we can get you to the finish line.