How to pay off your mortgage faster and save thousands
- Luke McKenzie
- Apr 23
- 4 min read
Aspire2Wealth's Luke Mckenzie explains how owning a home in Perth is a significant achievement, but for many, the goal doesn’t stop at getting the keys. The next milestone is paying off the mortgage as quickly and efficiently as possible.
The good news? With the right strategies, you can potentially save thousands in interest and achieve financial freedom years earlier.
Why paying off your mortgage faster matters
Your home loan is likely one of the largest financial commitments you'll ever make. Over a 30-year term, even a small reduction in the interest rate or loan duration can lead to substantial savings.
Beyond financial gains, paying off your mortgage faster can reduce stress, improve cash flow, and free up money for other goals like investing or travel.
1. Make extra repayments regularly
One of the most effective ways to reduce your loan balance is to make extra repayments. Even small additional payments can make a big difference over time due to the power of compounding savings.
How it helps:
Reduces the principal faster
Cuts down on total interest paid
Shortens the loan term
For example, adding just $100 a month to your repayments on a $500,000 loan at 6% interest could save you over $40,000 in interest and cut your loan term by several years.
💡 Check that your mortgage allows additional repayments without penalties—many variable-rate loans do.
2. Switch to fortnightly repayments
Instead of paying monthly, consider paying half the monthly repayment every fortnight. Since there are 26 fortnights in a year, you'll make the equivalent of 13 monthly repayments annually.
This simple strategy helps reduce your loan term and interest without needing a major financial overhaul.
3. Use an offset account effectively
An offset account is a transaction account linked to your home loan. The balance in this account is offset against your loan principal, reducing the interest charged.
Key benefits:
every dollar in the account reduces your loan interest
you still have access to your funds if needed
great for households with fluctuating income or savings.
4. Consider refinancing your home loan
Refinancing can secure a lower interest rate or better loan features, especially if your fixed term is ending or your property has gained value.
When to consider it:
your current rate is higher than what’s on the market
you want to consolidate other debts
you need to access equity for renovations or investments.
As Aspire2Wealth’s own case studies show, refinancing with the right broker support can result in both savings and improved flexibility. However, always assess any fees, potential break costs, and the impact of resetting your loan term.
Explore more: How to refinance your home loan
5. Round up your payments
Rounding your mortgage payment to the nearest $10, $50, or even $100 is a painless way to contribute more without feeling the pinch.
Example: If your repayment is $1,843 per month, round it up to $1,900. That extra $57 monthly adds up to $684 per year, accelerating your payoff and reducing interest.
6. Avoid redraw temptation
Some home loans include a redraw facility, allowing you to access extra repayments. While this can offer flexibility, dipping into it for non-essential spending undermines your repayment progress.
If you struggle with temptation, consider loans without a redraw option or work with a broker to choose a structure that aligns with your financial discipline.
7. Make lump sum repayments when possible
Using tax refunds, bonuses, or inheritances as lump sum contributions toward your mortgage can drastically reduce your balance. These one-off payments have a significant impact, particularly in the early years of your loan.
Tip: If you’re planning renovations or a major purchase, weigh the benefits of paying down the loan first—especially if your interest rate is higher than any expected investment return.
8. Choose the right loan structure from the start
If you're just entering the property market or reviewing your current loan, choosing the right loan structure—fixed, variable, or split—can make a difference in how quickly you can pay off your mortgage.
A mortgage broker, like Aspire2Wealth, can tailor advice based on your lifestyle and long-term goals. For example, a split loan might provide the security of fixed repayments alongside the flexibility to make extra payments.
9. Stay on top of rate changes and lender offers
With interest rates still fluctuating in 2025, savvy Perth homeowners are reviewing their loan annually. Lenders often reserve their best offers for new customers—meaning your loyalty could be costing you.
Monitoring the market or working with a broker ensures you’re not missing out on lower rates or features that better suit your needs.
Final thoughts: Stay proactive and review often
The journey to mortgage freedom starts with small, consistent actions. Whether you're a first-time buyer in Perth or already deep into your loan term, there's always room to improve your repayment strategy.
If you're unsure where to start, Aspire2Wealth can help you assess your loan, explore refinancing options, and set up a repayment plan that works for your lifestyle.
References
Aspire2 Wealth Advisers Pty Ltd ABN 42 125 897 903 is an authorised representative and credit representative of Charter Financial Planning Limited ABN 35 002 976 294, AFSL and Australian Credit Licence No. 234665.
This website contains information that is general in nature. It does not take into account the objectives, financial situation, or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.
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