A 30-year mortgage might seem like a long-term commitment, but with smart strategies, you can pay it off much sooner—saving tens of thousands in interest off your home loan and achieving financial freedom faster.
Here are four proven ways to pay off your mortgage early and become debt-free sooner:
1. Make extra mortgage repayments
Adding extra payments, even in small amounts, can significantly reduce the loan term of your mortgage and the total interest paid.
Example:
- Extra $200 per month on a $400,000 loan at 5% interest
- Savings: Over $60,000 in interest
- Loan paid off: 5 years earlier
2. Round up your home loan repayments
Rounding up your monthly mortgage repayment to the nearest hundred can make a big difference over time.
Example:
- Monthly repayment: $1,750 → Rounded up to $1,800
- Extra $50 per month can save thousands in interest
3. Refinance your home loan to a lower interest rate
Regularly reviewing your mortgage and refinancing to a lower interest rate can save you a substantial amount in interest over the term of your home loan.
Example:
- Refinancing from 7% to 6% on a $500,000 loan
- Savings: Over $150,000 in interest over the loan term
4. Use a mortgage offset or redraw facility
An offset account links to your mortgage, reducing the interest you pay by offsetting your loan balance with your savings.
Example:
- Offset account balance: $30,000 on a $400,000 loan
- Savings: Thousands in mortgage interest over time