Seriously Helpful 7 Ways to Save BIG on Your Home Loan

Your 10-minute guide to becoming a mortgage maven

House prices are rising, interest rates are higher than the record lows of 2022, and the cost of living is putting pressure on wallets. But the good news? There are steps you can take to reduce your home loan repayments—or at least make your loan a lot more comfortable.

Grab a coffee and read on!

Why You Should Be Proactive About Your Mortgage

The property and home loan environment has been turbulent. Understanding your options and making informed choices can help you:

• Reduce your repayments
• Save money over the long term
• Gain more control over your finances

Here’s your mortgage checklist to start taking action today.

01. Negotiate a Better Interest Rate

Many homeowners don’t know their current interest rate, yet mortgage repayments often take up over 40% of income. Even a small decrease in your rate can save thousands.

Example:

• Loan: $500,000, 25-year term, 6.5% p.a.
• Rate drops to 6% p.a. → save $71 per fortnight, $1,846 per year, $46,150 over the life of the loan!

How: Talk to a mortgage broker who can negotiate with your lender or compare deals elsewhere. They do the legwork for you.

02. Switch to Fortnightly Payments

Monthly repayments: 12 per year.
Fortnightly repayments: 26 per year → effectively one extra monthly payment annually.

Example:

• $500,000 loan at 6% p.a., 25 years
• Monthly → $85,983 in interest over the loan term
• Fortnightly → saves you thousands in interest

How: Your broker can calculate your long-term savings and arrange the switch.

03. Make Small Additional Repayments

Even small amounts above your scheduled repayment reduce your principal, which lowers interest over time.

Example:

• $500,000 loan at 6% p.a., 25 years
• Extra $50/week → save over $71,000 in interest

How: Your broker can check if your loan allows extra repayments and handle the paperwork.

04. Use an Offset Account or Redraw Facility

• Offset Account: Savings linked to your loan. Interest is calculated on loan minus balance. You can access the money anytime.
• Redraw Facility: Extra repayments can be withdrawn later, usually taking longer than an offset account.

Both reduce interest while keeping your funds accessible.

How: A broker can help you set this up or compare loans that offer these features.

05. Be Smart With Your Equity

If your property value has increased and you’ve paid down some principal:

• Negotiate a better rate
• Consolidate higher-interest debts (credit cards, personal loans) into your home loan to save interest

How: A broker can calculate your equity and run savings scenarios for rate reduction or debt consolidation.

06. Reconsider Your Loan Package

After some time with your home loan, assess which features you actually use.

• Some loan packages have higher fees for features you don’t need.
• Basic loans may offer redraw facilities or offset accounts with lower fees.
• Or you might benefit from bundling products if your circumstances have changed.

How: Your broker can evaluate your current loan, compare options, and manage the switch for you.

07. Get the Data You Need, When You Need It

Information is power:

• Know your interest rate, loan balance, and equity growth
• Track extra repayments and their effect on interest
• Access online portals or apps to manage your loan efficiently

How: Brokers know which lenders offer better digital interfaces and customer service. They can help you pick a lender that suits your needs.

Your Next Step

Not all loans are created equal. By being proactive, you could:

• Save money through refinancing or negotiating
• Find a loan that better suits your needs
• Take advantage of discounts or cashback deals

A mortgage broker can review your loan in minutes, doing the hard work for you. They’ll consider:

• Your financial goals
• Whether you could secure a more competitive deal
• Your loan structure
• Opportunities to save money

Don’t leave it to chance—ask for a review today.

 

General Advice & Credit Assessment Disclaimer

The content in this post is for general informational and educational purposes only. It should not be taken as personal credit or financial advice. Before making any decisions regarding a home loan, mortgage, or financial product, you should assess whether the information is appropriate for your specific needs, financial situation, and personal objectives.