The simplest way to pay off your mortgage

The simplest way to pay off your mortgage sooner is to make bigger mortgage repayments and get the money into your loan sooner.

Simplest way to pay of your home loan - Two Red Shoes Mortgage broker

Interest on a home loan is calculated on the daily balance, so reduce the balance and more of your repayments go towards the principle and not an interest bill. It’s that simple.

Strategies like paying weekly and fortnightly work well because they match your pay cycle, so it feels easier to send money from your wage each week or fortnight – and – because most lenders calculate a weekly repayment by dividing the monthly repayment by 4 & there aren’t exactly 4 weeks in every month you end up paying a whole month’s worth of additional repayments each year, without even feeling it. This would save you just under $40,000 and 4 years on an average $350,000 loan over the term of the loan.