Hero Image

Tips for reducing your mortgage

Things to consider

Pay fortnightly instead of monthly

By making mortgage repayments every fortnight instead of once a month, you effectively make an extra month’s payment; so 13 repayments instead of 12. That way you reduce the length of time it takes you to pay off your mortgage, and the total amount of interest you’ll pay over the term of your mortgage.


Shorten your mortgage term

Reducing your mortgage term to 20, 15, even 10 years shaves thousands of dollars in interest off your total mortgage. Even reducing your mortgage term by one year can save you hundreds.

For example:

Amount Borrowed Mortgage Term Interest Rate Interest Paid
$750,000 30 years 5.65% $808,537
$750,000 25 years 5.65% $651,925
SAVING     $156,612


A shorter term means your weekly or fornightly payments will increase, so always consult your budget to see if this is a viable option for you. A little extra above what is required, won't seem a lot on a week to week basis, but over decades will result in big savings. 


Make additional payments & "stock up" your mortgage account

We all love a good bonus at work, or maybe it's tax time and the return is good? Whatever the reasons, keeping as much monies in the Mortgage account as possible reduces the interest paid. For example:

Jenny puts her fortnightly wage into her home loan. She only transfers out of the home loan when she needs to. This way, Jenny ensures she pays as little as possible in interest. 


**IMPORTANT** - Check with your Mortgage Broker & Lender to ensure your home loan account, when in credit, can be withdrawn from without fees. 



Look out for refinancing deals

Keep an eye on the interest rate and consider refinancing if a better deal comes along. Look for refinancing offers with more flexibility or a better interest rate. Be sure to factor in any costs for refinancing when considering this option.

It’s worthwhile reviewing your mortgage on an annual basis to ensure you’re getting the best deal available to you. Our in-house broker Ben Truong, offers free financial health checks and remorselelly hunts down the best deals available in the marketplace for his clients. 

If interest rates do drop, keep up your repayments at your current level, rather than be tempted to spend the savings. By doing this, you’ll shave off a substantial portion of your loan principal.


Let us help you

Planning ahead for your future retirement and ensuring you’re on track to pay off your mortgage on time may seem challenging. If you’d like advice on how you can buy your home for less and pay off your mortgage sooner, get in touch with our Broker Ben Truong on 0402 688 886.



* Disclaimer: Any figures quoted are an approximation and should be treated as a guide. Harcourts Sheppard takes no responsibility for any results from this information. For an indepth financial health check, contact our very skilled in-house broker Ben Truong on 0402 688 886.