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How to pay your loan off sooner

Paying off your mortgage quickly can help you save on interest payments and achieve financial freedom sooner. Here are some strategies to consider when aiming to pay off your mortgage faster:

1. Weekly or Fortnightly Repayments: Instead of making monthly repayments, switch to fortnightly or weekly repayments. By doing so, you make the equivalent of an extra monthly repayment each year, as there are 26 fortnights in a year. This strategy helps you make more frequent payments, reducing the interest accrued on your loan and has the potential to reduce your loan term by years.

2. Increase Repayment Amounts: As your financial situation improves, consider increasing your repayment amounts. Even a small increase can have a significant impact over the life of your loan.

3. Make Extra Repayments: One of the most effective ways to pay off your mortgage faster is by making extra repayments. If you receive a large sum of money, such as an inheritance, bonus from work or a tax refund, consider making a lump sum payment towards your mortgage.

4. Offset Account: Consider using an offset account linked to your mortgage. An offset account is a transaction or savings account that offsets the balance against your mortgage principal. For example, if you have a $300,000 mortgage and $20,000 in your offset account, you only pay interest on $280,000.

*Remember, before implementing any of these strategies, it's essential to review your mortgage terms and conditions, as well as any potential fees or penalties for additional repayments especially if you are on a fixed-rate. Speak with us to ensure these strategies align with your overall financial goals and circumstances.

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