14 May 2026 – 3 minute read
Key take-outs
- Home owners have different reasons to want to pay off their mortgages sooner
- Your ability to pay of your mortgage sooner may depend on the type of home loan you've chosen
- You may be able to pay off your mortgage quicker by increasing the amount and/or frequency of repayments, making extra payments, refinancing, or setting up an offset account or redraw facility.
Why would I want to pay off my mortgage sooner?
There are a few reasons people try to pay off their home loan faster than the original loan term. Here are some of them:
- I want to be debt-free – A mortgage is often the biggest debt you'll take on in your lifetime – and the idea of being in debt can be undesirable to some people. Paying off your home loan not only means one less debt, but it could also bring peace of mind (particularly when approaching retirement age) and a sense of ownership and pride.
- I want to pay less interest – The amount of interest charged to your home loan account during the life of a loan can be significant. Even shaving a few years off your mortgage could mean considerable savings in interest, which means more money for other things that matter to you.
- I want to build equity faster – Equity is the difference between the current market value of your property and the amount you still owe on your home loan. If you're keen to boost the amount of equity you can tap into for other financial goals (such as investing in another property or the share market), paying off your home loan faster may help you get there.
Tips for paying off your mortgage sooner?
A few small changes could make a big difference in terms of how long it takes you to pay off your mortgage. The starting point is the type of loan you select.
1. Choose the right type of mortgage
The type of home loan you choose may impact your ability to pay it off sooner and the extent to which you pay interest. We will explore this in more detail below.
2. Increase your regular repayment amount
If you can afford to do so, increasing the amount you repay to your lender could reduce the amount of time it takes to pay off your mortgage. Paying more than the minimum repayment required will chip away at the amount of the principal you’re paying back, and the amount of interest you pay over the life of the loan.
Try our mortgage repayment calculator to see how quickly you could pay down your loan.
3. Make repayments more frequently
You may be able to become mortgage-free sooner by switching your monthly mortgage payment to fortnightly payments of half the amount. By switching from a monthly repayment if your budget allows, you’ll be paying down an extra month’s home loan repayment each year. That’s because you’ll be making 26 ‘half’ payments a year rather than 12 ‘full’ payments, which is equivalent to 13 monthly payments.
4. Make extra repayments
Some people choose to direct lump sum payments (such as from a tax refund, work bonus or an inheritance) straight to their home loan to reduce their mortgage balance.
These additional repayments can have a big impact on how quickly you pay off your home loan, especially in the early years of your mortgage – though your ability to make them will be dependent on the type of loan and any prepayment limits.
5. Refinancing
Refinancing your current loan may score you a lower interest rate, which will reduce the term of your loan if you keep repayments and loan term the same.
If you have a home loan with another lender, our team may be able to help you find one that better suits your needs and aspirations.
Learn how to refinance and make the switch to Westpac.
6. Set up an offset account or redraw facility
Depending on your loan type, you may be able to access an offset or redraw facility, which could help you reduce the amount of interest you pay – and therefore the amount of time your home loan takes to pay back. The more money you keep in your linked offset savings or transaction account or redraw facility, the bigger the savings and the sooner your loan could be paid off.
Does the type of mortgage I choose impact how fast I can pay it off?
When you initially decide on a home loan, interest rates and the ability to pay down the loan sooner will play a big part in your decision about which type to choose.
The broad options are fixed interest rate, variable interest rate, or a mixture of both (known as a split loan) – and you then need to think about interest only or loan principal and interest.
- Fixed rate loans: A fixed rate loan gives you stability and predictability in terms of repayments over a set term, but there may be limits on the extra repayments you can make with break costs triggered if limits are exceeded. So, if you're looking to pay down your mortgage quickly by increasing your repayments or adding a lump sum, a fixed loan might not be the right loan for you.
- Variable rate loans: A variable rate home loan gives you more flexibility, but you may be impacted by interest rate rises. When you take out a variable interest rate home loan, there's often no limit to the amount of extra payments you can make – but always make sure you read the fine print. Use our interest rate change calculator to see how interest rate changes may affect you.
- Interest only loan: If you have an interest only loan, you're only paying off the interest portion of your home loan, plus any fees. The total amount you've borrowed (the principal) stays the same. This means your repayments will be lower for a set period of time, but they will be higher when the interest-only period ends.
- Principal and interest loan: If you choose a principal and interest loan, the payments go towards paying off the principal loan amount and the interest, plus any fees. By the end of the loan term, you'll have repaid the amount borrowed, the total interest owed – and you'll be mortgage free.
Our home loan specialists love to help!
If you have questions about paying off your loan sooner or types of loans, we're here to help. For more information, call us on 132 558 or visit a branch to chat to your local Home Finance Manager.
