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For many, the downside of being a homeowner is having a home loan debt hanging over your head for years. However, there are ways to speed up the process and have your home loan paid off faster than you anticipated. Here are 6 hacks to help you:

## 1. Refinance to a lower rate, but don’t change your repayment amount

It’s a good idea to always be on the lookout for better home loan interest rates. Refinancing to a lower interest rate can save you thousands of dollars over the course of your loan term. With a lower interest rate, your monthly repayments will be less, making it easier for you to make extra repayments. These extra repayments will help you pay off your loan more quickly. 

Lendi can help you [refinance](https://www.lendi.com.au/owning-property/refinance/) your home loan completely online. Speak to one of our [Home Loan Specialists](https://www.lendi.com.au/book-appointment/) for free expert advice. 

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## 2. Decrease your loan repayment term and make higher repayments

When you refinance your loan, you can do more than just switch to a lower interest rate. Decreasing your loan term will help you pay off your home loan faster. Reasons to consider changing your loan repayment term could include:

- You now have a higher salary than when you first received your loan
- Changes in your financial circumstances (e.g. your children have moved out or you have less debt)

For example, if you initially got a home loan with a 30 year term but you’re now making twice as much as you were at the time, you could increase your repayments. By increasing your repayments, you can decrease your loan term. 

## 3. Use a redraw facility or an offset account

Redraw facilities and offset accounts are great loan features to make use of when you are trying to pay off your home loan faster. A [redraw facility](https://www.lendi.com.au/guides/home-loan-redraw-facility/) is a useful home loan feature that allows you to access the funds from any extra repayments that you make on your loan. It also reduces the interest you are charged, but you may experience delays and fees when trying to redraw money. 

A similar loan feature is an offset account. An [offset account](https://www.lendi.com.au/guides/offset-account/) is a savings account linked to your home loan that helps to reduce how much interest you pay. For example, if you have $200,000 to pay on your home loan and you have $30,000 in an offset account, interest will only be charged on $170,000. 

You can use the funds in your offset account for any expenses, but the more money you have sitting in your account, the more you save on interest. Keeping with the example above, if one day you spend $2000 from your offset account, your offset balance will be $28,000. Interest on your home loan will then be calculated based on $172,000 (i.e. 200,000 - $28,000).

The main differences between a redraw facility and an offset account is that you have easier access to your money with an offset account. To access funds from a redraw facility, you may be charged fees and experience delays. Unlike a redraw facility, an offset account doesn’t reduce your loan balance, it just offsets it so that you pay less interest. 

These two features aren’t usually available with fixed-rate loans, so you might need to be on a loan with a variable interest rate to be eligible. 

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## 4. Make extra repayments

It’s an obvious tip, but simply making additional repayments means that you can pay off your home loan faster. Have you received a tax refund, work bonus or an unexpected large sum of money lately? Consider putting it towards your loan. 

If you have a home loan with a fixed interest rate, make sure to check whether you can make extra repayments without penalty and whether there are any limits. Variable interest rate home loans give you more flexibility to make uncapped additional repayments. 

You could put your extra savings into an offset account if you’d still like to access them, or you can use a redraw facility which allows you to access your additional repayments. 

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## 5. Make weekly or fortnightly repayments

By making home loan repayments fortnightly, rather than monthly, you’ll effectively make an extra month’s payment per year. Because you’re paying your loan off faster, you’ll save on interest. You can even make repayments weekly. 

Most lenders have your repayment schedule set to monthly by default, so speak to them to find out how you can pay weekly or fortnightly. 

## 6. Avoid interest only home loans

When you have an interest-only loan, you aren’t reducing your loan balance and you won’t actually pay off your loan. Due to investment property tax benefits, interest-only loans can be attractive in the short term. However, for the average owner-occupier home buyer, they can just delay how quickly you can pay off your loan. 

By paying both the principal (loan amount) and interest, you will pay off your loan faster. 

- __Related:__ [Are you ready to pay more when your interest-only period ends?](https://www.lendi.com.au/inspire/insights/are-you-ready-to-pay-more-when-your-interest-only-period-ends/)

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## Got a home loan question? Just ask!
We're here to help. Get free expert advice at a time that suits you. Choose a time to chat with a [Home Loan Specialist here](https://www.lendi.com.au/book-appointment/)

*The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.*