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5 Ways to pay off your home loan faster

A home loan is one of the biggest investments you will make in your life. It’s a debt burden that most people are stuck with and would like to eliminate as soon as possible. That’s why Opulent Finance has put together a list of ways you can pay off your home loan more quickly.

Making payments more frequently

It’s better to be making fortnightly repayments as opposed to monthly. That’s because when you pay fortnightly, you’re making 26 payments a year. If you were to instead split your monthly repayments in half, you would only be making 24 payments each year—two for each month. By structuring your loan with fortnightly payments, however, you’re paying down the equivalent of 13 months every year.

Since the repayments are individually smaller, you’ll hardly feel the difference and it should not impact your disposable income. Over the term of the loan however, this will make a huge difference and you will end up paying it off much earlier and with less accumulated interest than you anticipated.

Consolidating your debts

When you take out a personal loan or have a credit card, the interest rates you pay are much higher than the interest on your home loan. By consolidating your debt into your home loan, you are paying less in interest across all your loans. This can help you free up cash to make extra repayments to your home loan instead, which will benefit you in the long run.

Paying less interest and fewer fees makes the idea of consolidating your credit card debt into your home loan attractive, but you have to make sure you structure the consolidation in a way that doesn’t end up costing you more. As most home loans are for a period of 30 years, and credit card debts are for the length of time that it takes you to pay it off, you may end up paying more as you will be paying off your smaller debt for a longer period of time.

Offsetting your home loan

An offset account is a popular feature available on eligible everyday transaction accounts and eligible home loans. An offset account and the home loan are usually linked to reduce the overall interest on your mortgage or investment loan. By maintaining savings in an offset account with your mortgage provider, the interest you would normally receive on those savings instead goes to offsetting some of the interest payments that you would otherwise accrue on your home loan.

For example, you have a 30-year mortgage worth $300,000 and an interest rate of 3.90%, and you also maintain a $20,000 offset savings account with the same lender. Then the interest earned on that $20,000 could potentially save you $40,085.37 in mortgage interest repayments over the life of the loan.

Switching to a lender with a better rate

By seeking help from financial brokers, you may be able to find a lender better suited to your needs with a lower interest rate. With a lower interest rate, you could make the same repayments but end up paying off your loan a lot sooner. Do be aware though, that some lenders have exit fees on the loan so keep that in mind before making the big move.

Paying off the upfront fees

When you go to take out a loan, some lenders will allow you to borrow the upfront costs and mortgage fees. Be aware that by financing these costs, you’re just adding to the amount that you’re borrowing and will, therefore, take longer to pay it off—accruing interest all the way. If you can avoid financing your upfront fees with additional debt, you’ll reap the benefits in the end.

If you require further information or need assistance with your home loan, please contact the finance specialists at Opulent Finance on 03 8838 8726 or send us an email at info@opulentfinance.com.au.

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Siraj Ahmed
Siraj Ahmed
2020-11-18
Verified review
Excellent service. Got us a great loan option and also worked with the bank to get the loan approved during the heights of COVID.
Dhruv Satra
Dhruv Satra
2020-11-18
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Malaka Ekanayake
Malaka Ekanayake
2020-11-10
Verified review
We have had a very pleasant experience working with Opulent Finance. We did not have that much experience with house loans as we were first home buyers but working with Opulent  Finance team specially with Ishara, made that experience stress free one. She helped us secure an incredibly competitive interest rate and offered her guidance so we can take advantage of the future interest rate drop. Thank you Ishara, Dayan and team for your incredible support and we have no hesitation what so ever in recommending Opulent Finance for your financial needs
Uma Gunaratne
Uma Gunaratne
2020-11-04
Verified review
Ishara is highly knowledgeable and if you are a first home buyer and new to the intricacies of all that home loans entail, she will really take you under her wing and impart her knowledge and experience and treat you as one of her own. She is also extremely patient but will also be very truthful and upfront in situations which is honestly what you need. She did a very complicated loan for us, and was so incredible efficient and organised with all the paperwork that was required. Not only that, she helped us secure an incredibly competitive interest rate! Ishara has probably spent hours and hours explaining to me details and giving me really good guidance through this momentous period in life! During the cooling off period and settlement, she was constantly chasing up our loan and honestly took a personal interest in the outcome. Our solicitor was also very happy about working with Ishara as she was following the entire process, was always up to date and very easy to work with. Considering that our entire process happened during the covid-19 lock-down and work from home environment, we have nothing but good things to say about how professional Ishara was as she didn't let a single thing slip. We are so glad that we have both Ishara and Dayan in our corner. We will definitely be using them for all future financing needs. Thank you Ishara, Dayan and team!
Harsha Ill
Harsha Ill
2020-10-11
Verified review
Opulent Finance gave professional advice for my unique home loan requirement. They respond quickly with the proper information. The process was smooth and I felt comfortable to deal with the team. The team is friendly and professional to deal with. Highly recommended for any one looking for finance.
S P
S P
2020-09-22
Verified review
I have been dealing with Ishara at Opulent Finance for over 6 months now and she has been faultless. She has helped me secure a loan pre-approval in no time and assisted me with my property purchases. I could not recommend Ishara highly enough.
Afshin Koohestani
Afshin Koohestani
2020-09-22
Verified review
Good service and offers.
Janaka Kumara
Janaka Kumara
2020-08-22
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A big shout out to Dayan and his team for the seamless service provided during the refinancing process. Thoroughly professional team that pays attention to every detail and has been extremely transparent throughout the process. A team that always has the best interest of clients in mind and makes all efforts to provide the right advise and outcomes to the clients. Highly recommended!
Rakesh Mistry
Rakesh Mistry
2020-08-19
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They called me back with solution
Indra Jaya
Indra Jaya
2020-08-12
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