These home loans offer low costs, coupled with a host of features, giving the best overall value.
7+
Great
These home loans may have slightly higher interest rates or fewer features but overall, a competitive offering.
5+
Standard
Usually the home loans would offer above average rates. They may still include some competitive features.
0+
Basic
Higher costs and/or fewer features.
Key takeaways
A one-off lump sum repayment towards your home loan can save you money on interest and help you pay your home off sooner.
You can use our home loan lump sum calculator to see what difference that payment could make to your loan.
Using an offset account is a good alternative to making a lump sum payment, as you can easily access the funds while saving on interest.
How to use the home loan lump sum calculator
In order to use the lump sum calculator, you’ll need the following details:
Your loan amount. This is the amount of money you borrowed.
The loan term. This is the original length of your home loan. Most Australians choose between 20 and 30-year loan terms.
The interest rate. The loan's interest rate determines how much interest you pay on top of the loan principal.
The repayment frequency. Repayments can be weekly, fortnightly, or monthly, depending upon your agreement with your lender.
Lump sum repayment. Enter the single amount you wish to add to the loan as a lump sum repayment.
Lump sum made at year. This refers to when you make the lump sum repayment. If you're making the payment 2 years into your loan, select 2 years.
Once you input all of the necessary information into the calculator, hit 'calculate' and you'll see your new loan term and how much interest you'll save.
Want to make multiple frequent payments instead?
Use our extra repayments calculator to see how much you could save.
Susan just inherited $10,000 unexpectedly. She decides to pay it as a lump sum toward her mortgage. In order to figure out exactly what effect a lump sum will have she uses a lump sum calculator.
Susan inputs her:
Original loan amount: $600,000
Interest rate: 5.00%
Loan term (30 years) and her repayment frequency (monthly)
Her $10,000 lump sum mortgage repayment
The year of her loan she's making the repayment: 4 years
In this scenario, Susan will save $25,828.68 in interest and take 11 months off her loan.
* This is a fictional, but realistic, example.
According to Finder's Wealth Building Report in 2024, 9% of investors said that paying off their debt contributed the most to their net wealth.
How an offset account can be an alternative to a lump sum payment
If you have come into a large sum of money, you can also put it in an offset account (if your home loan has one, of course). You'll enjoy a similar benefit to the lump sum payment but with greater flexibility.
An offset account is a bank account connected to your home loan. Any money that you save in it will be offset against your loan. So you're paying interest on the amount of your home loan minus that cash.
This has the same benefit as a lump sum repayment but with a huge difference. Once you pay the lump sum into your home loan, it's gone. Your lender may let you access some of it via a redraw facility but it's their money now.
With an offset account you still retain total control over the cash while paying the same as if you'd put the money towards the loan. So if you suddenly need some money to cover an urgent expense, it's right there.
If your loan doesn't have an offset account, you're confident you won't need to access the funds, or you know you can access it easily via redraw, then making a lump sum mortgage repayment is not a bad idea. Getting out of debt faster is always wise.
Our expert says: Consider your self-control
"When considering whether you should put a large sum of money towards your home loan or into your offset account there's a key difference that you need to weigh up: accessibility.
Often touted as a benefit of the offset account, any money you put in here can be accessed like any transaction account. This is great if you think you might need the cash soon or you'd like it close by for emergencies, but it can also make it too easy to access. If you'd rather keep the money at arm's length so you know you won't spend it, making a lump sum payment could be what's best for you. You could still access it via a redraw facility if you ever need to in an emergency. Just check your lender's policy on redraw fees and limits."
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Frequently asked questions about home loan lump sum repayments
A lump sum mortgage repayment is where you make one large additional repayment to your home loan. It's different to when you choose to make frequent extra repayments. The larger your lump sum payment, the more you'll save.
Any additional funds you can put into your home loan is worth it. It will help you pay down your loan balance sooner, saving you on the interest you'll pay over the life of the loan. Putting the lump sum into an offset account will give you the same benefit, but it'll be much easier for you to access. This can be a good thing or a bad thing!
No, whether you make a lump sum payment or you put the money into an offset account, your monthly repayments will not change. Instead, you'll pay the loan off (and own your home) much faster.
Sources
What is Finder Score?
The Finder Score crunches 7,000 home loans across 120+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best home loans for cashback, you can see how each home loan stacks up against other home loans with the same borrower type, rate type and repayment type. We also take into consideration the amount of cashback offered when calculating the Score so you can tell if it's really worth it.
Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University.
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hi, we are about to receive a 100k lump sum we have two home loans on the one property 213k at 5.45% and 129k at 5.69% also a 7k personnel loan at 16.4%. into which loan(s) should we place the money
Finder
ShirleyJuly 9, 2013Finder
Hi Gareth,
Thanks for your comment.
Since finder.com.au is a comparison website we’re not licensed to give any personalised financial advice. You may want to consider speaking to a financial advisor.
Home equity can help you access extra financing from lenders to spend on things like home renovations or investment properties. Find out how you can calculate the equity in your home.
An offset account calculator can help you estimate the savings of a 100% home loan offset. Calculate your savings and compare 100% offset home loans today.
Our extra loan repayment calculator helps you see how you could save big on interest. Free, fast and easy to use - calculate in 1 minute!
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hi, we are about to receive a 100k lump sum we have two home loans on the one property 213k at 5.45% and 129k at 5.69% also a 7k personnel loan at 16.4%. into which loan(s) should we place the money
Hi Gareth,
Thanks for your comment.
Since finder.com.au is a comparison website we’re not licensed to give any personalised financial advice. You may want to consider speaking to a financial advisor.
Cheers,
Shirley