10 Effective Ways to Pay Your Home Loans Off Faster

A home loan is one of the most significant financial commitments most Australians will ever make. With typical loan terms spanning 25 to 30 years, mortgage repayments can feel like a financial burden. The interest alone can add hundreds of thousands of dollars to the total cost over time.

Paying off your home loan early means paying less in interest, gaining more financial freedom, and achieving your goal of homeownership sooner. It opens up money for other priorities, whether that's investing, boosting your super, or finally taking that overseas holiday.

The good news? You don’t need to be a high-income earner or slash your lifestyle. Here’s how to pay your home loans off faster — starting now.

1. Make Extra Repayments Whenever You Can

Every extra dollar you put toward your mortgage goes directly to the principal loan amount, reducing the interest charged and shortening your loan term.

Switching from monthly repayments to fortnightly repayments (or even weekly repayments) can also be beneficial. Paying $1,000 every fortnight adds up to $26,000 a year instead of $24,000 (based on monthly payments). That extra month each year makes a huge difference over time.

Compound interest means the sooner you reduce your loan balance, the less interest you’ll pay. Even small extra repayments, consistently made, can significantly reduce your loan term.

2. Use an Offset Account

An offset account is a bank account linked to your home loan. The balance in this account is offset against your loan balance, which reduces the interest charged. If your loan is $450,000 and your offset balance is $30,000, you’ll only be charged interest on $420,000. That’s serious savings.

Offset accounts are flexible, allowing you to access your money when needed. Just make sure your offset account is 100% offset, and watch out for monthly offset fees that could cancel out your savings.

Buying a Home in North Brisbane? Let Us Guide You from Day One. At Kelly Brothers Finance, our North Brisbane mortgage brokers do more than secure your home loan. We help structure it for faster payoff and long-term savings. Book a free consultation now at (07) 3847 9450. 

3. Increase Your Regular Repayment Amount

Round up your repayments. If your monthly repayment is $1,700, consider increasing it to $1,850. That extra $150 goes directly towards your principal, reducing the interest you pay long term. A few hundred dollars extra each month might not feel like much now, but over 20 years, it can mean tens of thousands saved in interest.

You can use a mortgage calculator to see how much faster you’ll pay off your loan by increasing your repayment amount, even slightly.

4. Make Lump Sum Payments

Got a tax refund? Bonus from work? Sold your car or received an inheritance? Include it as a lump sum repayment in your mortgage. Most lenders allow you to make extra lump sum payments without penalty, but check your home loan terms. Some fixed-rate loans may charge break costs or limit additional repayments.

A single lump sum payment — especially early in your loan term — can knock months (or years) off your loan and save thousands in interest.

5. Refinance to a Lower Interest Rate

Interest rates change, and lenders compete. If your current rate is no longer competitive, refinancing can significantly reduce your interest expense. Use comparison websites or speak with a mortgage broker to compare deals. Look at the comparison rate (which includes fees) rather than just the advertised rate.

Always factor in break fees, loan establishment fees, and other associated costs to determine if refinancing is worthwhile. A refinance calculator can help you crunch the numbers.

6. Switch to a Loan with No Ongoing Fees

Ongoing fees, such as monthly service fees or annual package fees, can quietly erode your savings. Over 25 years, even $10/month adds up to $3,000. Review your loan and see what fees you’re paying. Consider switching to a fee-free loan that meets your financial needs and offers features like a redraw facility or offset account without charging extra.

Some lenders now offer complete home loan packages that bundle useful features without ongoing fees.

Unlock a Smarter Home Loan Strategy with Local Experts. Don’t just settle for any loan. Get tailored guidance from Kelly Brothers Finance North Brisbane mortgage brokers who understand the market and your goals. We’ll help you set up a home loan that works harder and pays off sooner. Call us at (07) 3847 9450 to get started. 

7. Choose a Shorter Loan Term

It’s tempting to go for a 30-year mortgage to keep repayments low. But the trade-off is that you pay much more interest over time. A 15-year loan term means higher monthly payments, but you save big in the long run. You also build equity in your home faster.

For example, a $500,000 loan over 30 years at 6% interest means nearly $580,000 in interest. Over 15 years, the exact loan costs about $260,000 in interest, a massive saving. Use a mortgage calculator to test what you can realistically afford.

8. Avoid Interest-Only Loans

Interest-only home loans mean you only pay the interest for a set period (usually 1–5 years). That might sound appealing if you want lower repayments upfront, but it’s not a fast track to a mortgage-free life.

Why? Because you’re not paying down the principal. Once the interest-only period ends, your repayments increase, and you’re still sitting on a large loan balance.

Unless you’re using this strategy for an investment property, interest-only repayments usually delay real progress.

9. Review Your Loan Regularly

Home loan products change, and so does your financial situation. Review your mortgage at least once a year to ensure it remains suitable for you.

Is your variable interest rate still competitive? Has your property value increased? Can you renegotiate with your lender or split your home loan into fixed and variable components?

Annual check-ins allow you to adjust your repayment cycle, compare new offers, and stay on track with your goals.

10. Cut Back on Unnecessary Expenses and Redirect Savings

Take control of your spending. That doesn’t mean living on two-minute noodles; it just means being more mindful.

Cancel unused subscriptions, reduce credit card spending, and eat out less often. Use a budgeting app to track your spending and see where your money goes.

Then take those savings and redirect them into your home loan repayments. Even $50–$100 extra per month adds up over the years, and keeps more of your money out of the bank’s pocket.

Ready to Pay Off Your Home Loan Faster? Our experienced North Brisbane mortgage brokers at Kelly Brothers Finance can review your current loan, find smarter repayment strategies, and help you refinance with confidence. To book a free chat, call us today at (07) 3847 9450. 

FAQs

Are there tricks to paying off your mortgage faster?

Yes, but it’s about discipline, not secrets. Extra repayments, fortnightly payments, offset accounts, refinancing, and putting windfalls like tax refunds into your loan all help cut interest and shorten the loan term.

What is the 2% rule for mortgage payoff?

The 2% rule is an informal guide: increase your repayments by 2% of your loan balance each year to steadily cut interest and shorten your loan term.

How to pay off a 30-year mortgage in 10 years in Australia?

You’d need to triple your repayments and avoid lifestyle creep. Key steps: refinance, make lump sum payments, switch to frequent repayments, and follow a strict budget to put every spare dollar into your loan.

How to pay off a $400,000 mortgage in 5 years?

You’d need to repay $6,700–$7,500 per month, depending on your rate. That means a high income, strict budgeting, and no major new debts. Use an offset account, avoid interest-only loans, and consider splitting your loan for flexibility.

What happens if I pay an extra $100 a month on my mortgage?

An extra $100 a month cuts your loan balance, reduces interest, and shortens your mortgage. Over 25–30 years, it could save tens of thousands and shave years off your term.

Is it better to pay my mortgage weekly or monthly?

Fortnightly or weekly repayments reduce interest over time and can shave years off your loan. They result in an extra month of payments per year.

How much can I save by making extra repayments?

Thousands. Even $50/week can cut years off your loan and save tens of thousands in interest. Try a mortgage calculator to see your exact savings.

What are the hidden fees I should watch out for?

Look for monthly offset fees, redraw charges, annual package fees, and break costs (especially on fixed interest rate loans).

Can I make a lump sum repayment at any time?

Usually yes, but check your lender's rules, especially if you’re on a fixed-rate loan, which might have early repayment limits or break fees.

Final Thoughts

Paying off your home loan faster isn’t just possible. It’s achievable with the right plan and discipline. Every extra repayment, smart refinancing move, or budget tweak can bring you closer to a mortgage-free life and long-term financial freedom. 

If you're planning to purchase a home in North Brisbane, our local brokers are here to guide you through your options and help structure a smarter loan from day one. For expert home loan advice tailored to your financial situation, speak with the team at Kelly Brothers Finance. 

To book a free consultation, call us today at (07) 3847 9450, and take the next step toward owning your home sooner.