Make extra repayments

Dreaming of a mortgage-free life? Consider making extra repayments on your loan on top of the minimum repayment amount.

This could be as part of your scheduled repayments or on an ad-hoc basis when you have some spare money to throw into your home loan. This will reduce your loan balance so you’ll pay less interest and pay off your loan sooner.

And don’t forget, if you need the funds at a later time, you can easily access the extra repayments via redraw on a variable rate loan. Just remember that for fixed rate loans at Virgin Money, you can make up to $10,000 in extra repayments per year before penalty costs and can only redraw once the loan switches over to a variable rate.


Make more frequent repayments

Here’s a handy tip: why not make fortnightly repayments instead of monthly repayments? You’ll effectively be making one extra payment each year and reduce the length of your loan term, as it goes towards paying down your balance. Every little bit counts.


Maximise your offset

An offset account is your secret weapon. The balance of your offset account is deducted from your home loan when loan interest is calculated. That means you’ll pay more of your principal component of the loan and pay off your home loan sooner. Also consider making all regular deposits, like your salary, into your offset account to maximise the funds in that account.


Split your loan to get the best of both worlds

Don’t be afraid to change the structure of your loan to keep it working hard for you. Thinking about locking your loan into a low fixed rate, but not feeling sure? Consider splitting your loan.

You’ll be able to enjoy the flexibility of a variable rate and the certainty of a fixed rate. This could allow you to have lower repayments set on the fixed rate split and the flexibility to offset against the variable rate split if you have some spare funds available. Because if you’re wondering how to pay off a mortgage faster, Australia has seen some really low rates lately but no one knows the future. A split loan could be the best of both worlds.

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