Can I pay the loan off quicker without penalty?
The faster you can pay off your home loan the better, but you need to be careful.
If you have a fixed rate loan then your repayments are normally restricted, so check your loan details before overpaying fortnightly or monthly, or making a lump sum repayment, to make sure you don't get stung with any fees or charges.
If you have a variable rate loan there are several ways to pay off your loan faster.
- Make sure that you are paying everything you can afford to into your mortgage. To do this first track your spending by using a budgeting tool to understand where your money is going.
- If you make repayments monthly try switching to fortnightly. Paying more often will reduce the total amount of interest you pay over time and help you pay off your loan quicker.
- Consider paying your salary into your mortgage account and then paying your bills from there. Having a lower balance will reduce the amount of interest you pay over time.
- If you can afford it, when interest rates go down, try to keep the same level of repayments. This is a great way to get ahead on your repayments.