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Want to Pay Off Your Mortgage Sooner? Let’s Do the Math

Making extra repayments on your home loan can save you thousands in interest and help you pay off your loan years earlier. But how much of a difference do those extra payments really make?

Use our Extra Repayment Calculator to see how additional contributions can reduce your loan balance, cut down interest costs, and shorten your loan term. Our built-in home loan repayment graph visually tracks your loan progress, showing the long-term impact of extra repayments.

4 Key Factors That Impact How Much You Save on Your Home Loan

Interest Rates

The interest rate on your loan directly affects how much you pay in total interest over time. A higher interest rate means more of your repayments go towards interest instead of reducing your loan balance. Making extra repayments helps cut down interest faster, saving you thousands over the loan’s lifetime.

Loan Balance

The size of your remaining loan plays a crucial role in how much interest you’ll pay. The larger the balance, the more interest is charged. By making extra repayments early in your loan term, you reduce the outstanding balance faster, decreasing the interest that accumulates over time.

Repayment Frequency

Making repayments more frequently can significantly reduce the amount of interest you pay. Switching from monthly to fortnightly or weekly repayments means you make an extra month’s worth of repayments each year, which helps lower your principal and cuts years off your loan term.

Loan Term Remaining

Extra repayments have the greatest impact when made earlier in your loan. During the first few years, most of your repayments go towards interest. By making additional payments early on, you reduce the principal faster, decreasing the overall interest you’ll pay and shortening your loan term.

Loan Repayment Calculator - FAQs

Fixed-rate loans often have restrictions on extra repayments, with some lenders capping the amount you can pay annually. If you’re considering making additional repayments, check with your lender to see if limits apply or if there are penalty fees.

Even small additional repayments can add up significantly over time. For example, adding an extra $100 per month on a 25-year home loan could save you thousands in interest and cut years off your loan term. Use our calculator to see exactly how your repayments impact your loan.

This depends on your financial goals. If your mortgage rate is higher than the return on savings accounts, making extra repayments may be more beneficial. However, if you need easy access to funds, saving might be the better option. A mortgage broker can help assess what’s best for your situation.

Yes! By making repayments every two weeks instead of monthly, you effectively make one extra repayment per year. Over time, this can shave years off your mortgage and reduce interest costs.

If your loan has a redraw facility, you may be able to withdraw any extra payments you’ve made. However, some lenders impose limits or fees, so it’s always best to check your loan’s terms and conditions.

If your loan has a redraw facility, extra payments may still be accessible if you need them later. However, some lenders may have conditions—always check the fine print.

Most variable-rate home loans allow extra repayments, but fixed-rate loans may have restrictions. Check with your lender to confirm.

You can set up regular additional payments, make lump sum deposits, or increase your regular repayment amount through your lender or banking app.

What's Next?

Now that you know how extra repayments can save you money and shorten your loan term, it’s time to explore your options.

You can write to us at [email protected] or call us on 08 6285 8120.

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