Find a branch
Contact
Help
Get mortgage free sooner.
Here are seven simple tips to help repay your home loan faster.
We've got some simple ways to reduce the time it takes to pay off your home loan – and cut down on the total interest you’ll pay.
You might be able to apply one or more of these strategies to help you get mortgage free sooner. Each tip comes with an example based on a $750,000 loan, over 30 years, at a 6% interest rate*. This lets you compare the impact each strategy can have.
To see how much difference these changes could make to your loan amount and repayment period, try our calculators. Or get in touch on 0800 177 277 and we can run the numbers for you and help you tailor your home loan so it’s paid off faster.
Everyone’s situation is different, so talk to one of our Home Loan Experts about what might work best for your circumstances.
1. Offset your savings to reduce your interest costs.
Your savings can be ‘offset’ against your floating loan balance to decrease the amount of interest you pay. Our Choices Floating with Offset lets you link your everyday and savings accounts to a floating loan. You only pay interest on the difference between the total balance of those accounts and the balance of the floating loan.
For example, if you had a $20,000 Choices Floating with Offset and maintained a balance of at least $20,000 across your linked savings and everyday accounts, you will not pay any interest on that $20,000 portion of the floating loan.
Try our Choices Floating with Offset calculator to see if it could work for you.
Learn about our Choices Offset loan.
How much could you save?*
Let’s say you put $20,000 of your $750,000 loan into a Choices Floating with Offset leaving the remaining $730,000 fixed at 6%. Keeping your monthly repayment the same on the Choices Fixed loan, you will pay off your loan two years sooner and save over $90,000 in interest.
This scenario compares a $750,000 loan over 30 years at 6% to a split loan of $730,000 fixed for 28 years at 6% and $20,000 floating with offset that is fully offset with savings.
2. Keep repayments the same when interest rates fall.
When your interest rate falls, your home loan payments also decrease. If you can afford to maintain your payments, you’ll save time and interest costs off your home loan. A 2% decrease in the interest rate, if you keep the payments the same, could cut around 10 years off the life of your home loan.
How much could you save?*
If the interest rate drops from 8% to 6%, monthly repayments on a $750,000 loan will fall from $5,504 to $4,497. If you maintain your repayments at $5,504 you could pay your loan off 10 years and 11 months sooner and make six-figure savings on interest.
This scenario is based on a $750,000 loan over 30 years at 8% compared to a loan at 6% from the first day of the loan.
3. Round up your repayments.
When you’re arranging your loan, round your repayment amount up. This increases your repayments by a manageable amount, while cutting repayment time and interest off your home loan.
How much could you save?*
Repayments on a $750,000 loan at 6% over 30 years will be $4,497. If you round up to $4,600, you will save over $60,000 in interest over the life of the loan and pay it off one year and nine months sooner.
This scenario is based on a $750,000 loan, over 30 years, at a 6% interest rate.
4. Pay off a lump sum.
If you receive a bonus or unexpected windfall, you could use some of it to pay down debt. You can pay off any floating loan immediately or pay a chunk off a fixed loan when your fixed term expires. You can pay a lump sum on your fixed loan during your fixed term but prepayment costs may apply.
Understand early repayments and prepayment costs
How much could you save?*
If you make a $10,000 lump sum payment at year five of your 30 year loan, you’ll save over $33,000 in interest costs over the life of your loan and pay if off nine months sooner.
This scenario is based on a $750,000 loan, over 30 years, at a 6% interest rate keeping your loan repayment at $4,497 after making a $10,000 lump sum payment.
5. Mix and match your loans.
Different types of loans work well for different people, and sometimes the best structure is a combination of loan types and fixed terms. For example, our Choices Everyday Floating loan offers revolving credit, which can be a useful tool for funding home renovations, or if your income is inconsistent.
Loan structuring can seem complicated, but our Home Loan Experts are here to provide tailored advice to fit your situation.
How much could you save?*
By tailoring your loan structure to suit your needs and reviewing it regularly to optimise your borrowing, you could make savings over the life of a loan and pay it off sooner.
By tailoring your loan structure to suit your needs and reviewing it regularly to optimise your borrowing, you could make savings over the life of a loan and pay it off sooner.
Let’s say you’re splitting the fixed loan of $750,000 at 6% to $675,000 at 6% fixed and $75,000 at 6.99% floating. In addition to the monthly payments on the floating loan, if you paid a lump sum of $2,500 each year, the interest you would save is over $42,000.
6. Pay fortnightly instead of monthly.
Instead of making 12 monthly repayments on your loan, you could make 26 fortnightly repayments. This adds up to an extra payment per year but could save you long-term.
Fine tune your home loan calculator
When using this calculator, make sure that you update the Fine-tuned Loan Payment Amount accordingly.
How much could you save?*
If you have a $750,000 loan for 30 years at 6%, switching from monthly repayments of $4,497 to fortnightly repayments of $2,249 could take five years and seven months off your home loan and save you over $185,000 in interest costs over the life of your loan.
This scenario is based on a $750,000 loan at a 6% interest rate making 26 fortnightly payments of $2,249 instead of 12 payments of $4,497 monthly.
7. Increase your repayments when your income increases.
If you’ve had a pay rise, you can increase your repayments even on a fixed home loan. Our Choices Fixed Home Loan allows you to increase repayments by up to 20% above the minimum at any time.
How much could you save?*
Let’s say you got a pay increase and felt you could afford to increase your monthly loan repayments from $4,497 to $4,800. You would pay off your home loan four years and seven months sooner and save more than $150,000 in interest over the life of your loan.
This scenario is based on a $750,000 loan, increased payments from the first day of the loan, at a 6% interest rate.
Experts who can help you get it done sooner.
Let’s help you work out ways to reduce costs, have more flexibility, save time, and get you mortgage free sooner.
Already have a home loan with Westpac?
Have a home loan elsewhere?
Calculators.
Things you should know.
Interest rates are subject to change without notice. Westpac's home loan lending criteria, terms and conditions apply. A low equity margin may apply.
*All examples are based on a $750,000 home loan, paid over 30 years, fixed at a constant 6% interest rate and does not constitute financial advice. This is a demonstration of the potential impact of various changes and doesn’t reflect interest rate fluctuations or the specifics of any individual situation. Talk to us for personalised advice on paying your home loan off sooner.
Documents and fees
View terms and conditions for all our home lending products here.