Ideas to help you pay down your home loan

How can you repay your mortgage more quickly?

You might choose to boost your repayments now, so that you can enjoy that feeling of freedom even quicker than you thought. You might bring forward the overseas holiday you’ve been promising yourself, or help your children complete their education.

Perhaps you’re planning on renovating your home to add value to your property and help you enjoy it to the fullest. You could also be well placed to increase the wealth you’ve built up in your home by purchasing an investment property or by investing in shares, opens in new window.

Here are some ideas that could help.

1. Open an offset account

A mortgage offset account is a savings or transaction account linked to your home loan.

It can help you pay less interest because, every day, the money in your offset account is offset from the outstanding balance of your home loan before the interest is calculated.

To make the most of this, you could have your salary paid into your offset account. Then simply use a credit card to cover your day-to-day expenses. Pay your credit card bill in full, or if you have a balance transfer the 'interest free days payment', before the end of the interest-free period and it’s a low-cost way of keeping money in your offset account.

You’ll be able to view your offset account’s balance from NAB Internet Banking.

2. Make more frequent repayments

By changing your repayment cycle you could end up paying off your loan sooner.

Moving from monthly to fortnightly or weekly ensures that you're paying more off your home loan at frequent intervals. Paying fortnightly allows you to squeeze in the equivalent of one extra monthly repayment per year.

This extra amount comes directly off your loan principal, and reduces the amount on which future interest will be calculated.

As the interest is less, more of your repayment goes towards paying off the principal off your loan, so your mortgage gets paid off sooner.

3. Make extra repayments

A tax return, a birthday present, a sale on eBay – make a habit of ploughing every lump sum you receive into your mortgage.

4. Look at your balance of fixed to variable rate loans

Some borrowers split their loan between fixed and variable rates. If you make additional payments, you’ll need to consider if there are limits on how much extra you can pay on your fixed loan.

If the timing is right and you want to pay off more, you could consider shifting a portion of your loan to variable.

Don’t forget, until your fixed rate term is up, you may be charged break fees to switch from fixed to variable.

5. Look at ways to cut back

Be tough but realistic – your aim is to make changes that you can live with for at least the next five years.

Once you’ve calculated how much you can save, arrange to have that amount paid regularly and automatically into your mortgage account.

Cutting out just one cup of takeaway coffee every working day could save $1,000 a year. Always keep an eye out for new opportunities, including better deals on essentials such as gas and electricity.

6. Rent out a room

Enlist other people to help pay off your mortgage by renting out your spare room.

Accommodation websites such as can help with short-term lets or you might prefer a longer-term arrangement with a local or overseas student.

You might need permission from your local council and, if you’re living in an apartment, you must check the rules with the body corporate. If all goes well, you could meet some interesting people as you slash years off your home loan.

Have confidence in your future with help from a financial adviser.

Important information

The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.

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