There are a few simple but effective ways to get rid of your home loan sooner. With interest rates at an all time low, now is a great time to focus on getting your home loan under control.

First thing to do is make sure you are on the lowest rate product that is appropriate and best suited to your situation. Consult your Mortgage Broker to get your loan on the best rate you can.

Second is paying fortnightly as there are 26 fortnights in a year, and the bank just halves the contracted monthly repayment, so effectively you pay 13 months of repayments every 12 months.

Third is using an offset account (if appropriate with your budget and cash flow). Fourth and probably the most effective is increasing your repayments for the long term benefit of saving thousands in interest and paying the loan off sooner. The average home loan of $340,000 at today’s best rates could mean you pay $1700 approx month on a 30 year term loan, instead of $2149 at the long term average interest rate. If your budget can allow this pay the repayment amount as if the rate was higher eg 6.5%. Paying $449 a month extra is all principal instead of interest that on the above averages would save approx. $103,000 and you pay off the loan over 10 years early!

Another strategy is to look at your preferred timeframe to pay off the loan eg 15 years, then match the repayment to that with the long term average interest rate, 6.5%. There are lots of useful calculators which you can use to work out how much you can save on www.moneysmart.gov.au or  www.totalchoicehomeloans.com.au/calculators. The Moneysmart website also has budget planners so you can work out what you are spending your income on, and maybe where you can cut back to assist with extra repayments. Your local Mortgage Broker will be able to assist with this.