Pave The Path to Fast Track Paying Off Your Mortgage — As real estate often outpaces inflation over time, paying off your mortgage rapidly can drastically build wealth faster.
The sooner you're mortgage free, the quicker you unlock full equity in your property and stop paying interest charges each month.
But which mortgage features and strategies optimize for super fast repayment? Let's explore the options.

Offset Account

An offset account can shave years off your mortgage by having your extra cash offset against the loan amount you're paying interest on. Any funds in the 100% offset transaction account are deducted from your outstanding mortgage balance before calculating interest charges. It's like making a lump sum prepayment without locking that money away. For example, say you have $30,000 in an offset account attached to your $400,000 mortgage. You are only charged interest on an effective loan amount of $370,000 for that period. Convenient access to savings can be maintained while chipping away at principal more rapidly.

Short Loan Term

When purchasing or refinancing, consider opting for a shorter loan term of 20 years or even 15 years rather than the standard 30. Your monthly payments will increase to repay the loan faster, but far less interest accrues in those fewer years. The trade-off can massively reduce your total interest paid over the life of the loan. Run the numbers on exactly how much you can save compared to a traditional 30-year loan.

Fortnightly Repayments

Instead of monthly payments, structuring fortnightly payments can result in one additional full mortgage payment per year. This is a subtle yet powerful technique to shave years off your loan without drastic budget impact.

Extra Repayments

Nearly all mortgages allow making additional principal payments above the scheduled amount with no fees or penalties. Making regular extra payments as large as possible means paying far less total interest. Put any pay raises, bonuses, and other cash windfalls directly toward extra payments to accelerate payoff rapidly.

Refinancing Options

As your income grows over time, refinancing to a lower interest rate mortgage can dramatically speed repayment. Even a 0.5% rate drop may be worthwhile depending on fees. Also consider refinancing to a loan with more repayment flexibility - offset accounts, redraw facilities and penalty-free extra repayments.

Rent Out a Spare Room

Enlist others to help crush your mortgage by renting out spare rooms. List on accommodation sites like Airbnb for short-term guests, or find a long-term tenant. Apply all rental income directly towards your mortgage principal. However, do make sure you are in compliance with any municipal regulations or community rules around tenants. If living in an apartment, you must check with the body corporate first.

Ready to get started?

Investors Mortgage works closely with home buyers and property investors to develop mortgage strategies optimized for rapid repayment. We'll analyze your current finances, future goals, cash flow capabilities and more to recommend the ultimate mortgage product and techniques for your needs. Start building wealth through real estate equity faster by contacting us today!