How to pay off your mortgage faster: 5 ways ranked

The quick answer

For this hypothetical $600,000 loan, the results depend on the chosen rate, extra payment and offset balance. In this model, paying the equivalent of one extra monthly repayment each year saves $168,267. A lower-rate scenario keeps the remaining term unchanged. The combined scenario also assumes the same loan permits extra repayments and a full offset at the modelled rate; the table does not identify an available product or establish eligibility.

The worked example: a hypothetical $600,000 loan

We ran one hypothetical loan through every option, using the same repayment engine as our extra repayment calculator and offset savings calculator. The table is ranked by interest saved against the baseline of paying the minimum at the starting rate.

• The lower rate is an illustrative input, not a confirmed refinance offer. Check the quoted rate, comparison rate, fees, eligibility, offset availability and extra-payment limits for the same product before relying on a combination.
• Rates: a hypothetical starting rate of 6.39% p.a. and a hypothetical lower rate of 5.99% p.a.. Both are modelling inputs chosen for illustration, not current market rates, a quoted product or a refinance offer. Current dated rates, each with its comparison rate, are on the Home Loan Rate Index and the average home loan rate page.
• Loan: $600,000, 30 year term, principal and interest, monthly repayments and monthly interest. Each rate is held constant for the whole term, and the lower-rate rows keep the same 30 year term. No fees, switching costs, break costs, redraws or rate changes are included.
• Minimum repayment: $3,749.11 a month at 6.39% p.a.. At 5.99% p.a. it is $3,593.45 a month.
• Fortnightly row: half the monthly repayment ($1,874.55) paid 26 times a year. Our calculator converts fortnightly amounts as amount x 26 / 12, so this works out to an extra $312.43 a month on average. Entering that amount as a monthly extra in the calculator approximately reproduces the row: the table shows repayments rounded to the cent, while the model uses unrounded values, so a calculator result can differ by a few dollars.
• Offset row: $20,000 held in a full offset account at the starting rate for the whole loan, with nothing withdrawn. Whether a loan includes an offset, and at what rate and cost, depends on the product.

1. Check your rate before you pay extra

The rate sets how much of every repayment goes to interest, so it is worth checking first. Moneysmart notes that variable rates on the market can differ by more than 2%, and that switching to a lower rate while keeping your repayments the same pays the loan off sooner (Moneysmart, updated 9 September 2026).

In our model, a hypothetical lower rate of 5.99% p.a. instead of 6.39% p.a. saves $56,038 over 30 years if the borrower pays the lower rate's minimum of $3,593.45. Retaining the original $3,749.11 payment instead raises the modelled saving to $142,149, with the loan cleared 3 years 1 month early. These rows show what a lower rate would be worth if one were available; they do not show that a lender offers it or that a borrower qualifies.

A switch has costs, so count discharge, application, valuation and government fees with our guide to the hidden costs of refinancing, then net them off in the refinance savings calculator. Compare loans on the comparison rate, not the headline rate alone, and compare refinancing costs, rates and eligibility on the refinance rates page.

2. Pay half your monthly repayment every fortnight

A year has 26 fortnights. Paying half the monthly amount every fortnight adds up to 13 monthly repayments a year instead of 12, the equivalent of one extra month's repayment each year, as Moneysmart explains. On our $600,000 loan that means $1,874.55 a fortnight instead of $3,749.11 a month.

That small change is the biggest single lever in the table: $168,267 less interest and the loan paid off in 24 years 3 months instead of 30 years.

The saving only comes from paying half the monthly amount. If a lender works out your fortnightly repayment as the yearly total divided by 26, you pay the same amount each year as you would monthly and the loan barely shortens. Ask your lender which figure it uses before you switch.

3. Add a fixed extra amount each month

Paying $200 a month above the minimum saves $118,509 in our example and takes 4 years off the loan. Rounding your repayment up to a neat figure, or putting a tax refund or bonus straight into the loan, works the same way. Extra money paid in the early years does the most work, because that is when most of each repayment goes to interest (Moneysmart).

Model your own figure in the extra repayment calculator. Not every loan treats extras the same, so compare home loans that allow extra repayments by their conditions as well as their rates.

Fixed rate loans often cap extra repayments at an annual allowance, and paying more than the cap or paying the loan out early can trigger break costs. The cap is a product condition rather than a market rule, so check your contract first. Our guide to fixed rate break cost traps explains how those costs are worked out.

4. Use an offset account

An offset account is a transaction or savings account linked to the loan. Its balance is subtracted from the loan balance before interest is charged. Moneysmart's example: with a $500,000 loan and $20,000 in offset, you pay interest on $480,000.

In our model, keeping $20,000 in a full offset at the starting rate for the life of the $600,000 loan saves $104,102 and clears it 2 years 3 months early, while the money stays yours to spend. Moneysmart also notes that if your offset balance is always low, for example under $10,000, the feature may not be worth paying for.

Offset loans can carry a higher rate or a package fee, so weigh the saving against the offset rate premium. For how offset differs from redraw on access and tax, see offset vs redraw.

5. Stack them

The combined row assumes one loan that offers the hypothetical lower rate of 5.99% p.a., permits extra repayments and includes a full offset at that rate. On those assumptions, retaining the original $3,749.11 payment, adding $200 a month and holding $20,000 in offset pays our $600,000 loan off in 22 years 7 months, 7 years 5 months early, with $282,012 less interest.

That is less than the three single savings added together, because each lever shrinks the balance the others work on. It is about 5 times the modelled saving from the lower rate alone at its minimum ($56,038). The combination only applies if the same product supports each feature, so check the rate, comparison rate, fees, eligibility, offset availability and extra-payment limits for that one loan.

Paying off faster is not always the best move

Every dollar in the table assumes the money would otherwise sit idle. Before putting spare cash into the loan, check these first.

This information is general only and does not take into account your objectives, financial situation or needs. If you would like these numbers run on your own loan, book a free online Teams meeting.

• Clear higher interest debt first, such as credit cards or personal loans.
• Keep an emergency buffer you can reach. Offset money stays accessible, while Moneysmart notes some lenders limit redraw, charge a fee or delay access.
• On a fixed rate, stay inside the extra repayment allowance to avoid break costs.
• If the home could become an investment property later, offset and redraw are treated differently for tax. See offset vs redraw.

How far ahead are Australian borrowers already?

Further than you might think. The Reserve Bank's October 2026 Financial Stability Review found that most mortgage holders keep large savings buffers in offset and redraw accounts, and that the median borrower could cover more than a year of scheduled repayments from those buffers at current interest rates, a stronger position than before the pandemic.

The same review found no meaningful increase so far in the share of borrowers persistently drawing those buffers down. In other words, many households are already using the offset and extra repayment levers on this page.

How long does it take to pay off a mortgage in Australia?

A mortgage runs for its contracted term unless you pay more than the minimum. In our example a hypothetical $600,000 loan at 6.39% p.a. over 30 years takes the full 30 years on minimum repayments, 26 years with $200 extra a month, and 22 years 7 months in the combined scenario, which assumes one loan offers every feature at the lower rate. Put your own balance, rate and remaining term into the extra repayment calculator to see your date.

Is it better to pay weekly or fortnightly?

What matters is the yearly total, not the frequency. A quarter of the monthly amount every week and half of it every fortnight both add up to 13 monthly repayments a year, so in our model both save the same $168,267. Weekly money reaches the loan a little earlier, which can save slightly more in practice. If the weekly or fortnightly amount is set as the yearly total divided by 52 or 26, the yearly total does not change and most of the saving disappears.

Is an offset account better than extra repayments?

Dollar for dollar at the same rate, money in a full offset account saves the same interest as the same money paid into the loan. The difference is access. Offset money stays yours to spend, while extra repayments usually come back only through redraw, which some lenders limit or charge for. An offset loan can also cost more through a higher rate or package fee, so compare the offset rate premium against the interest your balance would save.

Does refinancing reset my loan term?

It can. A new loan is set up over the term you apply for, and a fresh 30 years lowers the repayment but stretches the debt back out. In our model, a hypothetical lower rate of 5.99% p.a. instead of 6.39% p.a. with the lower minimum saves $56,038. Retaining the original $3,749.11 payment saves $142,149 and clears the loan in 26 years 11 months. Both rows keep the same 30 year term and exclude switching costs. Ask for a term that matches the years you have left, or keep paying the old amount.