Too many people we speak to simply set and forget their home loan repayments.

They don’t realise that one of the most effective ways to pay off their home loan more quickly and save money on interest is to make additional payments, even if it’s only a minimal amount.

Regularly paying a little bit extra or making lump sum payments will have a significant impact on lowering your loan.

Here are two great examples:

John and Sally have been paying off their $300,000 mortgage for 5 years.

They have been comfortably managing their repayments of $1,430 a month.

After working out their budget, Sally suggests they could afford to pay an extra $250 a month if they both pack their lunch most days rather than buy take away while at work.

This will shave five years and eight months off their loan term and save them $39,562 in interest. Not bad for an extra $60 a week!

You can also save on interest and reduce your loan term by making a lump sum payment.

Lets say John receives a work bonus and a decent tax refund totally $20,000 and decides to put that money on the mortgage.

This will save John and Sally $31,000 in interest and reduce their loan term by three years.

Inspired to put some extra cash on your home loan now?