How to pay off your mortgage faster in Australia: 14 proven ways

By Crown Money · Updated October 2026 · 10 minute read

All figures below use one transparent example: a $650,000 owner-occupied principal-and-interest loan at 6.00% over 30 years, close to the average new Australian home loan. The minimum repayment is $3,897 a month, and on the bank's schedule you'd pay $752,948 in interest, more than you borrowed. Each strategy is priced on its own; combining them saves more than the sum of the parts. Want your own numbers? Build your free Mortgage PayOff Plan.

Why is it so hard to pay off a mortgage?

Because interest is front-loaded. Interest is calculated on your balance every day and charged monthly, and your balance is biggest at the start. Of the very first $3,897 repayment on our example loan, $3,250 is interest and only $647 reduces what you owe. On minimum repayments, you don't pay more principal than interest until about year 19.

The flip side is the opportunity: every extra dollar paid early stops charging interest for the rest of the loan, so money paid in the first few years is worth several times as much as the same money paid late.

14 ways to pay off your mortgage faster

1. Use a 100% offset account

An offset account is a transaction account linked to your loan. Every dollar in it is subtracted from your loan balance before interest is calculated each night. $20,000 kept in offset saves about $92,000 and 1.9 years on our example loan, and the money stays yours, instantly accessible. Because the saving isn't income, it isn't taxed, so it usually beats a high-interest savings account while you have a mortgage.

2. Land your pay in the offset

Point every salary at the offset from payday. Even money that sits there for a week or two before it's spent reduces that night's interest. It costs nothing and needs no change to your budget.

3. Pay fortnightly instead of monthly

Pay half your monthly repayment every fortnight. There are 26 fortnights a year, so you make the equivalent of 13 monthly repayments instead of 12. On our example loan that's 5.4 years sooner and about $159,600 less interest, from one call to your lender.

4. Make regular extra repayments

The proportion matters more than the loan size: on a $400,000 loan, an extra $500 a month saves about 10 years and $182,600; on a $900,000 loan, an extra $1,500 saves about 12 years and $480,900.

5. Automate a weekly "sweep"

Willpower fails; automation doesn't. Pay bills from a bills account, give yourself a weekly spending allowance, and every week sweep whatever is left above a safety buffer into the loan. Weekly sweeps beat month-end transfers because the money starts saving interest sooner.

6. Get your rate reviewed, and keep your old repayment

Lenders often charge existing customers more than new ones, a "loyalty tax" commonly worth 0.3% to 0.5%. Ask for a review once a year. The trick is to keep paying your old repayment when the rate drops: a 0.25% cut saves about 2 years and $94,000; a 0.5% cut saves about 3.6 years and $170,700.

7. Never restart the 30-year clock when you refinance

A refinance at a lower rate is often written as a brand-new 30-year term. That drops your repayment but puts you back at the start of the interest curve. Keep your remaining term (or shorter) and your current repayment, so the lower rate becomes extra principal.

8. Keep your repayment when rates fall

When rates drop, your minimum repayment drops too. If you keep paying the old amount, the difference becomes an extra repayment you never have to find.

9. Send lump sums straight to the loan

Tax refunds, bonuses and the proceeds of selling things you don't use should go to the loan the day they land. A $1,800 tax refund every year saves about 2.8 years and $83,600. A one-off $20,000 lump sum in year three saves about 2 years and $74,900.

10. Drop the package fee

Many "package" home loans charge around $395 a year for features most borrowers never use. Dropping it and paying that money into the loan instead saves about 8 months and $20,600.

11. Audit your spending for leaks

Export 90 days of statements and sort every transaction into Need, Want or Leak. Leaks are spending you wouldn't have chosen in advance: forgotten subscriptions, delivery-app markups, duplicate insurance. In a typical household this finds hundreds of dollars a month without touching the things you value. Every $100 a month redirected to the loan saves about $59,000 on our example loan.

12. Run an annual bill sweep

Once a year, benchmark insurance, energy, phone and internet against the market and ask your providers to match or you'll switch. Retention teams often have discounts they only release when asked.

13. Clear high-interest debt first, then roll it in

Credit cards cost around 20% a year. Clear the highest-rate debt first, cap card limits (lenders count the full limit as debt), and when a car loan or card is paid off, keep paying the same amount into the mortgage.

14. Add income, and send 100% of it to the loan

Overtime, side work or renting a spare room can accelerate everything, as long as every after-tax dollar goes straight to the loan before it reaches your spending. Income has no ceiling; spending cuts do.

How do I stay on track for years?

• Keep a buffer. Hold 2 to 3 months of living costs in your offset. It still cuts interest, and one bad month won't undo three good ones.
• Pre-decide rate rises. Write down now: "if rates rise, we keep our total payment the same."
• Watch the nightly interest meter. Our example loan costs about $107 a night at the start. Watching that number fall is more motivating than watching the balance.
• Review quarterly. Balance against plan, leaks regrowing, buffer intact, rate still competitive.

What should I do once the mortgage is paid off?

Don't stop the habit; redirect it. Keep paying the same amount each month, but into investments for your future self. Some Australians also use debt recycling during the payoff to make investment interest tax-deductible, but it adds risk and must be designed with a licensed financial adviser and tax agent.

Frequently asked questions

Figures are modelled with standard amortisation at a constant 6.00% p.a.; real rates move and your results will differ. Source of method and model: Mortgage Engineering by Crown Money. This is general information only and does not take into account your objectives, financial situation or needs. Crown Lending Pty Ltd, Australian Credit Licence 388279.