Catherine Mapusua

How to pay your mortgage off faster in 2021

We ask an expert in lending on how to take advantage of the current low-interest rate environment to pay down a mortgage faster.


With interest rates in Australia at an all-time low and a number of new digital lenders entering the cluttered market, now is the best time to look at your current financial situation and wherever possible, pay your mortgage off faster.

We’ve asked Catherine Mapusua, Head of Lending at WLTH for her expertise on how to take advantage of the current environment to pay down debt.

Scout out a lower, competitive interest rate

With the mortgage market so highly competitive at the moment, you shouldn’t have to look far to find a lower interest rate offer.
But how do I find a better rate?

Start off by working out what features of your current loan you want to retain, and then compare the interest rates on similar loans at various lenders.

Found a better rate elsewhere? Grab it!

Otherwise you can also try asking your current lender to match it, or at least offer you an economical alternative.

Unleash the offset power

Offset accounts, similar to an everyday savings bank account but instead linked to your mortgage, can often help you get the most bang for your buck.

The beauty of an offset loan is instead of being paid separate interest on your savings by the bank or traditional financial institutions, the value of any cash in an offset account is deducted from your mortgage balance.

This way, you can make your savings work for you, as you will normally save much more in mortgage interest than you would earn on a separate savings account.

Say no to ‘interest-only’

Leave ‘interest-only’ offers at the door.

Although there are some benefits associated with an interest-only loan such as lower repayments, the reality is: ‘interest only’ offers will not assist you in paying off your mortgage faster.

By choosing to only pay the interest on your loan for a set period of time, you’ll be paying off the required principal amount at a higher rate once the interest-only period expires.

Sometimes, this can be thousands of extra dollars in interest.

Up your regular repayment amount

If you can afford it, you should consider increasing your regular repayment amount, as it’s a simpler way to shorten the lifespan of your loan.

Many major banks calculate interest on a daily basis, which means during a standard 30-year principal and interest mortgage, most of your payments in the first five or so years will go towards paying off interest.

Make extra repayments

Finally, gather up your end of year bonuses, tax refunds, birthday money from Grandma or spare cash from selling unwanted items around the house, and consider diverting these funds to your loan.

While not all Aussies are in the financial position to make extra repayments to their mortgage, it’s important to remember that there are a multitude of options available to make your dreams of being financially-free a reality.

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