Easy ways to pay off your home loan a lot faster

Have you ever pictured what life would be like if you were mortgage-free? No big monthly mortgage repayment or interest rate uncertainty. Having the freedom to put money towards other big-ticket items or adventures that you’ve been dreaming about for years. There’s nothing quite like the feeling of owning your property outright. Our Gold Coast mortgage brokers know that it’s achievable in less time than what your home loan statement tells you. Follow these seven straight-forward steps and you could be on the road to home loan freedom a whole lot faster.

1. Check regularly that your home loan is right for your situation

It may be surprising, but the cheapest mortgage isn’t always the best one, depending on your situation. The right home loan should have a tailored combination of a competitive rate, plus features you will actually use to make your loan easier to manage.

You should review your home loan at least every 12 months. If you haven’t had a home loan health check recently to ensure yours fits your needs, then don’t delay in speaking to an experienced mortgage broker (like us!).

At no cost to you, we will take an in-depth look at your individual situation and compare your current loan to hundreds of others from over 20 lenders. Don’t keep paying off a home loan that’s not giving you maximum benefits.

2. Treat your home loan like a savings account

It’s a simple strategy that many borrowers use to pay their home loan down faster. When you deposit cash into your mortgage instead of a separate savings account, you’ll save more in interest on the loan than you’d earn with a separate savings account.

Our Broadbeach and Arundel-based mortgage brokers can make sure that your home loan offers a redraw facility (as many do), so that you’ll be able to access the cash if something urgent happens and you need it. Or, if you want to be able to access the cash more freely for daily expenses, then you can keep your money in a loan offset account.

Many home loans can include both offset accounts and redraw facilities. So, if you don’t currently have them with your loan, we can help you get access to them through either your existing loan or by switching. We are also happy to meet and take you through you how to use these features to your advantage.

3. Identify any hidden charges you could be avoiding

Paying monthly account-keeping fees on your home loan can be just like paying a higher interest rate! Many banks have now scrapped monthly account-keeping fees, so if you’re paying them, it could be time to find a better and less costly option or lender.

When our teams at Mortgage Choice in Broadbeach and Arundel review your home loan, we identify any fees that could be adding up to more than you might expect. We will help you negotiate with your lender to remove or reduce these fees, or we can look at finding you a loan with fewer or no fees.

4. Increase your repayment amount (by even a little bit)

It may be surprising but paying just a single extra dollar each week into your home loan will see it drop much faster. That’s because any additional repayments come straight off the loan balance. By making extra repayments, the following month’s interest charge is lower, so more of your regular repayment goes towards the loan balance. This is a fantastic way to steam ahead with paying off your home loan.

5. Add any lump sum payments when possible

You might be able to make just one large additional payment at some stage, or you might have opportunities throughout the year when extra cash comes your way. Either way, a lump sum payment can make a big difference to the length of your home loan term. One-off payments like tax refunds, end of year work bonuses, or maybe even an inheritance are all good examples. If you pay all, or even just part of these lump sums to your home loan, you could be making big steps towards becoming mortgage-free.

Remember, it’s important to check that a lump sum deposit will be permitted by your loan type. Our Gold Coast mortgage brokers will help you check that your home loan isn’t capped at a maximum additional yearly repayment, such as with some fixed rate loans.

6. Switch to weekly or fortnightly rather than monthly repayments

It’s an often-overlooked detail, but in fact both weekly and fortnightly mortgage repayments are more effective than monthly repayments for paying down your loan faster. Since interest is calculated daily, the more frequent payments you make, the more you could save in interest over the life of your loan.

You can calculate roughly how much time you can shave off the length of your mortgage by using our “How long to repay” calculator. With this calculator, you can compare monthly, fortnightly and weekly repayment frequencies and see what a huge difference it can make!

7. Property investment to pay your loans faster

While investing in property may sound like you’d be increasing your debt rather than reducing it, a savvy investment can actually help you pay off your home loan in record time. If you select the right property in an up-and-coming area, by selling the property when the value rises, you could pay off the investment debt as well as a large portion of your home mortgage.

This strategy can be a bit riskier, but our team have seen it successfully done time and again. There are even firms that we work with at Mortgage Choice in Broadbeach and Arundel, who specialise in this type of property investment and can help with wealth creation and becoming mortgage-free.

We can help you become mortgage-free faster

As a team of experienced mortgage brokers, we love seeing our clients achieve their goals more quickly. Also, our service to review your home loan will never cost you a cent, so you won’t have anything to lose by having a chat.

Call 07 5676 6433 for Broadbeach, 07 5594 6746 for Arundel or for Hope Island call 07 5594 0800. You can also book a free, no-obligation appointment online with one of our mortgage brokers directly at our locations - click to book for Broadbeach, Arundel or Hope Island.