How to get mortgage-free faster

Paying off a mortgage can seem like a daunting task. But the quicker you pay it off, the less it will end up costing you. Knowing a few simple tricks can help you become mortgage-free faster, and save thousands of dollars in interest. 

It’s a good idea to pay off as much as you can realistically afford with each repayment. Even small increases in your repayments can take years off the length and cost of a mortgage.

For example, if you have a $250,000 mortgage with a 6.5% interest rate and make fortnightly repayments of $800, it will take you 23 years and five months to pay off. Over that time you would have spent over $237,000 in interest alone.

If you increased your repayments to $900 a fortnight, you would take 18 years and three months to become mortgage-free and pay $177,000 in interest. That $100 increase each fortnight shortens your mortgage by over five years and saves around $60,000 in interest.

If you’re having trouble meeting your repayments, coordinating them with your payday could help. If you can pay off the amount that realistically fits your budget when you get paid, you won’t risk over spending and then running short before the next repayment is due.

Look at whether you can increase the frequency of your repayments. For example, if you pay your mortgage monthly, change to fortnightly repayments of at least half the amount you were paying each month. This will pay off your mortgage faster and save on interest.

If you’re on a fixed rate there may be charges for early repayment – so check out these costs first or wait until your mortgage comes up for review.

Use our mortgage calculators to work out how changes in repayments will affect your mortgage and decide the best plan for you.