See how a few smart decisions could help you pay off your home loan faster.
Enter the following details into the calculator to get an indication of how long it will take you to repay your mortgage.
- Loan amount - This refers to how much you've borrowed, or plan to borrow from a lender.
- Interest rate - This is the fee a lender charges a borrower for the use of their money. Interest is calculated daily on the outstanding amount of the loan and you can find this rate out by looking at the product review page for the home loan you're interested in an comparing with your own home loan statement if you already have a loan.
- Repayments - These are the payments you make towards your loan to pay if off.
- Repayment frequency - This refers to how often you'll make repayments to pay your loan off. You can choose weekly, fortnightly or monthly installments depending on your pay structure, loan terms and personal preference.
Tips to pay off your mortgage faster
- Increase your repayments, more often - Weekly and fortnightly repayments will save you money in interest and if you increase your repayments then you are also cutting down your principal. Double win.
- Repay more when you have unexpected funds - Consider dumping your tax refunds, work bonuses or dividends from any other investments. This can also help you cut down the interest payable.
- Increase your repayments when interest rates are low - The Reserve Bank of Australia's decision to cut interest rates in May had pushed many banks to cut their interest rate. Keep your mortgage repayments at the same level and you can cut years off your loan.
- Consider an offset account to have your wages paid into - This is when your savings compensate for a portion of the interest charged on your principal. The more funds you have in your offset account, the less interest you pay.
- Conduct a mortgage health check - Your loan may not be the most competitive product in the market anymore. Look at refinancing with your current lender and determine whether its worth staying.