Easy ways to pay your home loan faster

Who doesn't want to pay off their home loan faster? While it can mean more of a sacrifice right now, it may also mean more freedom and less financial pressure in the future.

Here are some easy practical ways you can save and pay your home loan off quicker.

Change your repayment frequency

An easy way to pay off your loan faster is to switch from monthly to fortnightly or weekly repayments, which has two benefits:

• Because interest is calculated daily you will reduce total interest paid over the life of the loan and;
• If you pay your repayment every fortnight, rather than every month, you'll make 26 repayments per year instead of 12 payments, which means you end up paying more off your loan over the course of the year, effectively reducing your interest.

Increase your repayment amount

You can also increase the amount you repay each period instead of just paying the minimum required by the bank. A handy way to do this is to maintain your payments at its current level even if interest rates drop.

Having a good grasp on your household budget will also help you work out how much extra you could pay off. Don't forget - you can always make one-off payments (like when you get a tax refund). At BankVic we can help you explore some of the options availabe to you to clear your home loan debt sooner.

Home loan health check

It's a good idea to review your mortgage from time to time to make sure you're on the best product for your needs, this may mean you refinance from one bank to another. While refinancing can seem like a lot of work, it could be worth the potential savings gained by moving to a loan with a lower interest rate.

You might also consider switching between a variable rate and a fixed rate. They each operate differently so it’s a good idea to think about which of these will be best for you over the coming few years. Another option is splitting your loan so that one portion is variable and another portion is fixed.

While you’re reviewing your mortgage, also consider setting up an offset account linked to your home loan. An offset account lets you pay less interest simply by keeping your savings in your offset account. There’s a lot to learn about offsets, but you can read more here.

Finally, when looking for a loan, make sure you check out whether there are any ongoing costs like annual or monthly fees. An annual fee of $395 can add up to $11,000 over a term of 30 years so if you can find a loan without an annual fee it could be a great saving.

Our team can help you

The BankVic lending team is available and here to help you. Because we’re the bank for police, emergency and health workers, we understand the unique circumstances borrowers from these sectors have and are experts at finding the right loans for them.

Get in touch with us today on 13 63 73 to find out how we can help you. Our lending consultants can talk to you over the phone or via video conference.

Contact BankVic to chat about home loans

Information in this article is general in nature and does not take into account your objectives, financial situation or needs. You should consider whether it is appropriate for you before acquiring a product or service. Police Financial Services Limited ABN 33 087 651 661 - trading as BankVic | AFSL and Australian Credit License 240293.