Manage my home loan

There are several things you can do that will help you pay off your home loan sooner:

• Lower your interest rate
• Make repayments more frequently
• Pay more than just the minimum repayments

With your current loan, you can do all of the above by making the most of your loan features or talking to one of our home lending experts about your loan. 

1. Lowering your interest rate

Getting the best rate possible on your mortgage is often the primary goal for all homeowners. Over time things can change with the economy and lending market, with rates either going up or coming down. It’s always a good idea to review your loan every couple of years to make sure your rate is as competitive as possible, especially if you’ve made significant progress on reducing your loan balance and increasing your equity. Requesting a Home Loan Health Check is a great way to make sure your home loan is working as hard as possible for your financial and homeownership goals.
 

Westpac home loan customers can ask for a Home Loan Health Check by calling 132 558 8am-8pm (Sydney time), Monday-Saturday, or request a callback.

Apart from directly getting a review of your home loan rate, there are other ways you can help lower your interest rate. You could:

Package your home loan

By packaging your home loan^#, you’ll receive a discount on your interest rate and no longer pay any monthly account fees on your home loan, transaction account, and eligible credit cards. Plus, once you’re a packaged customer, the annual package fee of $395 covers all the home loans you have with us — our way of rewarding loyal customers who take out multiple loans with Westpac.

Set up an offset account

You can use your savings to offset the total mortgage balance by linking an offset account to your home loan account before your interest is calculated. The more you put away as savings and leave in your offset account, the more you’ll save on interest repayments.
 

2. Make more frequent repayments

If you’re making your repayments monthly and you’re on a variable rate, simply by switching to fortnightly or weekly repayments, you’ll make significant savings on your home loan and could shave years off your loan term. More frequent payments work as interest is calculated off the loan balance. Making your repayments more often makes the loan balance used for calculating interest lower after a week or fortnight rather than after a whole month. You can easily change your frequency^ online by using Online Banking or the Westpac App.

3. Pay more than the minimum repayments

On top of the frequency of your repayments, you can also look at the amount you’re repaying.

Principal and interest repayments

When it comes to home loan repayments, it’s possible to make interest-only repayments for up to 5 years on an owner-occupied loan and up to 10 years on an investment loan. The only issue when you do this is that you’re not repaying the loan balance. You'll need to make principal and interest repayments if you want to pay off your loan in the long run. Also, interest rates on interest-only home loans tend to be higher than principal and interest loans. So, if your goal is to pay off your loan as quickly as possible, then principal and interest repayments may work better for you.

Extra repayments

By making extra repayments, as a lump sum or as more frequent additional amounts on top of your minimum repayments, you’ll be reducing the loan balance and, therefore, the interest you’ll pay, paying off your loan sooner. You can make as many extra repayments as you like on a variable rate loan and up to $30,000 per fixed period for a fixed rate loan without incurring break costs.

Any extra repayments you make are also fully accessible, meaning you can redraw the additional repayment amounts from your loan account if you need the funds. In many ways, it’s turning your loan into a savings account where you benefit from interest savings when the funds are held in your loan account. You can easily change your repayment amount online by using Online Banking or the Westpac App.

By making extra repayments, you’ll not only pay off your loan sooner, but it provides a buffer that could come in handy if an unexpected event should arise. Options like a repayment pause or reduced repayments could come in handy when managing your cash flow.

Setting up your repayments

To make things easier and to ensure you don’t miss a repayment, you can choose to either set up a direct debit or recurring payment.

For questions or more information about Westpac home loans call: 132 558 8am-8pm (Sydney time), Monday-Saturday, or request a callback.

There are several reasons why you might want to consider an interest-only repayment period. These could include:

Boost in cash flow due to a change in lifestyle

If you’re growing your family and expecting a new baby, the extra funds could come in handy. Or if you or a loved one is ill and you need to take time off work, paying interest-only for a time could help reduce financial stress. Or, if you are working through a separation or divorce, reducing your repayments by paying interest-only could make the transition easier.

Reduction in repayments to counter a change in finances

Life can be stressful at times, especially if there is a job loss or a reduced income. Interest-only repayments could ride you through a difficult patch, help with debt consolidation and cover the costs of unexpected bills to get you back on your feet.

Part of an investment property strategy

If you’re a property investor, interest-only repayments could offer significant savings regarding potential tax benefits, freeing up funds to make repairs or upgrades, or assisting with purchasing another investment property.

For questions or more information about interest-only repayments call: 132 558 8am-8pm (Sydney time), Monday-Saturday, or request a callback.

When you first took out your loan, you would have selected the type of home loan you wanted. You would have chosen from three loan products:

• Flexi First Option Home Loan (Basic variable loan)
• Rocket Repay Home Loan (Variable with offset)
• Fixed Options Home Loan (1-5 years fixed)

Over time, depending on the state of the economy, interest rates and property values will go up or down. When rates are rising, customers often look to fix their interest rate for a term. While when interest rates are low, a variable rate may be more attractive in terms of its flexibility.

Switching from variable to fixed

Lock in a fixed rate for 1 to 5 years and have the certainty of knowing what your repayments will be. 

What you need to know about fixed rate loans

• Variable offset benefits don’t apply to fixed loans
• You can only make up to $30,000 in extra repayments 
• If you make any changes to your fixed rate home loan during the fixed period, you'll incur break costs.   

Switching from fixed to variable 

Your fixed rate loan will automatically switch to a variable rate when your fixed period ends unless you re-fix it. Ending your fixed rate period early could attract break costs that run into the thousands. Weigh up the costs before deciding if switching to a variable rate home loan is right for you.

Split your variable home loan

Get flexibility and certainty when splitting your home loan into variable and fixed rate accounts. You can choose how much of your variable loan balance to divide into fixed and select if you'd like to repay either portion with principal and interest or interest-only repayments. 

By packaging your loan^# you’ll waive the split loan fee and benefit from interest rate discounts and no monthly account keeping fees. By splitting you keep your flexible variable account features, such as unlimited extra repayments, redraw and less interest with your offset facility.

For questions or more information about Westpac home loans call: 132 558 8am-8pm (Sydney time), Monday-Saturday, or request a callback.

Apart from having lump sum savings to pay for renovations or the deposit on a property, there are other ways that you can use the equity you have in your home to help you. Equity is the part of your home that you own outright. It’s the part of the loan that is the difference between the market value of your home and your loan balance. If your home’s current value is $500,000 and your loan balance is $280,000 your equity is $220,000. As it's best to have a loan to value ratio (LVR) of 80% or less to avoid Lender’s Mortgage Insurance, that means 80% of $500,000 would be $400,000, so you might be able to borrow up to $120,00.

Using equity to borrow

Once you know how much useable equity you have in your home, you’ll be able to work out if you can increase your current loan or apply for a supplementary loan. Using our equity calculator, you can get an idea of the potential usable equity in your home based on current market data.

Home loan increase

By applying for a home loan increase or ‘top up’, you can use the extra funds to pay for renovations or use it as a deposit for a new home loan on another property. Remember that if your existing loan is packaged, all the benefits of a packaged loan will also extend to your new loans. One annual $395 package fee will cover all your home loans, from one to two or more.

Construction loan

If you’re looking at taking on a major renovation, a construction loan may be your best bet. A construction loan is different to a standard home loan in that it is structured to provide progressive payments during the build. Therefore, you’ll not make repayments on the total amount borrowed but only repayments on funds that have been drawn down at that point in the process.

Loans for next home buyers and investors

When you’re buying your next home, there are many factors to consider. Should you:

• Sell or buy first?
• Keep your home and buy an investment property?
• Keep your current loan or get a new one?
• Fix, keep it variable, or split?
• Make interest-only or principal and interest repayments?

The answers to all these questions will depend on your current circumstances, your end goals, and which route you’d like to get there. Whether you keep your loan and use portability, you buy and use a bridging loan until you can sell, or you keep your home as an investment and buy a new one, we can help you find the right solution.

For questions or more information about equity, renovating or investing in property call: 132 558 8am-8pm (Sydney time), Monday-Saturday, or request a callback.

A Home Loan Health Check reviews your home loan, from the rate you’re paying to the type, frequency and amount of your repayments and the features and options that you’re using or could potentially use in the future. The health check is a free service to all our home loan customers. It allows you to discuss options and updates to your home loan with one of our lending specialists to ensure your home loan is working as hard as possible. It means proactively future proofing your loan to meet your needs now and into the future.

When should you request a Home Loan Health Check?

It’s a good idea to regularly review your home, especially if you’ve had your home loan for several years and haven’t had a check-up or are about to come off a fixed period or are thinking of making a significant update or change to your life. By asking for a Home Loan Health Check, we can tell you about features and options that you may not use to their full potential and for you to tell us what you want out of your home loan. If you’re thinking of selling, buying a new home, investing in property, or even refinancing, give us a call and let’s see what we can do for you.

To ask for a Home Loan Health Check call: 132 558 8am-8pm (Sydney time), Monday-Saturday, or request a callback.