Pay a little extra. Shave years off.
An extra $50 a week on a $600,000 mortgage at 6% over 30 years:
- 4 years off the loan
- $47,832 saved in interest
- Paid off in Feb 2052 instead of Sep 2056
That's the same $50 that walks out on Uber Eats twice.
And the free shortcut most people don't know
You don't even need to pay extra to save.
Switching from monthly to fortnightly repayments (half the amount, 26 times per year instead of one full amount 12 times) makes you pay 13 months' worth per year instead of 12.
On the same $600k loan at 6%:
- ~2 years off the loan
- ~$23,000 saved in interest
- Zero extra dollars out of your pocket
Combine the fortnightly switch with $50/week extra and you're now looking at 6+ years off and ~$70,000 saved.
Run the extra-repayments calculator → — slide, see the numbers, screenshot it.
Why early repayments hit hardest
Mortgages front-load interest. In year 1 of a 30-year loan at 6%, ~90% of every repayment goes to interest and only ~10% touches principal. By year 25, that flips.
Every dollar of extra principal in year 1 stops accruing interest for 29 more years. Every dollar in year 20 stops accruing for 10.
That's why a $5,000 tax refund thrown at your mortgage now saves ~$22,000 in interest and 6 months of your loan — but the same $5,000 in year 20 only saves about $5,000.
The rule: extras early > extras late. Even small ones.
Where to actually put the extra
Three options, each with a twist.
1. Direct extra repayment. Change your monthly direct debit to $X + your extra. Simplest. Goes straight to principal. Can't easily get it back (unless the loan has redraw).
2. Redraw facility. Extra sits inside your loan but can be pulled back if you need it. Same interest saving, more flexibility. Ask your bank if it's on your product.
3. Offset account. Extra sits in a linked bank account. The balance reduces the daily interest calculation on your loan. Same effect, most flexibility (no minimum, no processing delay). Usually costs a $10-15/month fee vs a basic loan — cross-check whether the fee is worth the flexibility for your situation.
The gotchas
- Fixed-rate loans usually cap extra repayments at $10,000–$30,000/year during the fixed period. Exceed the cap and you'll pay break costs that wipe out the interest savings. Variable loans usually have no cap.
- Extras have to be principal, not future repayments. Some banks default extra payments to "advance repayments" that don't reduce the loan — they let you skip future ones. Explicitly ask for them to go to PRINCIPAL.
- Fortnightly frequency isn't always available. Older loan products default to monthly. A 5-minute call to switch is usually free.
- Break costs on refinance. If you're partway through a fixed period and switch banks, break costs can be substantial. Wait until 90 days before roll-off.
The 3-minute action
- Log in to your banking app. Look at your home loan — is it monthly or fortnightly? Is it fixed or variable?
- Fixed with a big year-end cap? Call your bank; find out your annual limit. Set your extras below it.
- Variable + monthly? Change to fortnightly, half the amount. That's the free shortcut.
- Add $25/week (or whatever you can spare) via direct-debit boost. Set it and forget it.
Every dollar goes to your principal. Every year you're a bit closer.
What NestWise does
NestWise captures your mortgage as a proper entity — lender, rate, balance, offset, address — and watches it. When your rate drifts above the market or your fixed period is about to roll off, we flag it before the interest damage compounds.
Both mortgage and rent are free to track, forever, as many properties as you have.
Add your mortgage in the Housing hub → — scan a statement or fill in what you know.
Not financial advice. Numbers modelled with standard P&I amortisation — same math ASIC MoneySmart uses. Always verify with your lender or a licensed mortgage broker before making changes.