Paying Off Your Mortgage Faster: Smart Investment Strategies
Paying off your mortgage faster can bring a lot of upsides. It can significantly reduce your financial stress since you’ll have more room on your monthly budget. It can also empower you to go after other financial goals, essentially putting you on the path to financial freedom sooner. At Harmony Property, we will help you leverage property investment to reduce your debt efficiently and accelerate home ownership.
How Property Investment Helps You Pay Off Your Mortgage Loan Early
Using Rental Income for Mortgage Reduction
Investment properties generate rental income, which you can use to pay off your mortgage faster. By strategically reinvesting this regular income into your loan, you can reduce interest payments and shorten your loan term.
Structuring Loans for Maximum Benefit
Our team is ready to help you set up offset accounts, redraw facilities, and effective loan structuring techniques to ensure your home loan repayments are working in your favour—leading you closer to owning your home sooner.
Tax Benefits That Free Up Cash Flow
With the right property strategy, you can benefit from tax deductions that increase your overall cash flow. This additional cash can be redirected toward reducing your mortgage repayments faster.
Leveraging Capital Growth
As your investment properties grow in value, you can use equity to pay off your home loan faster. You can also leverage the equity to reinvest in additional properties that generate income and further accelerate your wealth-building journey.
Other Strategies to Pay Off Your Mortgage Quicker
Besides investing in properties, the following are proven techniques to assist you in paying off your mortgage and reducing your debt at a faster rate:
1. Make More Payments Per Year
Consider changing from monthly to fortnightly repayments. If you repay half your monthly home loan fortnightly, you are making 26 payments annually instead of 12—essentially another month’s worth of repayments each year. This technique can shave years off your home loan and have less interest in total.
Example
If your mortgage costs $2,000 per month, paying half that, $1,000, every fortnight equates to 26 payments per year—totalling $26,000 rather than $24,000. That slight tweak saves you thousands in interest over the term of the loan.
Calculate your potential savings with the help of our budget-planner calculator and see how changing your payment frequency will impact your loan duration.
2. Pay Additional Mortgage Payments Whenever You Can
Lump sums of tax refunds, work bonuses, or windfalls can reduce your principal balance significantly. The earlier you make these extra payments, the less interest you’ll pay throughout your loan. Even small, regular extra payments pay off hugely.
Curious whether you’ll have tax refunds? Use our income tax calculator to estimate your tax benefits and see if you can redirect these to your mortgage.
3. Take Advantage of Offset Accounts and Redraw Facilities
An offset account links your mortgage to a transaction account. The funds in the offset account reduce your home loan balance, and you save interest paid. A redraw facility allows you to make extra payments and access them later if needed. Both will save you interest and enable you to pay off your home loan faster while having flexibility for future cash needs.
4. Review and Reorganise Your Loan Structure
Refinance your home loan and save money while paying off your mortgage faster. You can explore offset accounts, split loans, or switching to a lower rate. Our consultants at Harmony Property can help you analyse your current loan and discover where you can save when you restructure or refinance it.
5. Weigh in on the ‘Pay Off Mortgage or Invest’ Options
Sometimes, putting more money into investments rather than paying off your house early is wiser. Interest rates, rates of return on investments, and long-term financial goals need to be considered. We can help you weigh your choices and select the most suitable for your needs.
Wondering how much equity you can access to invest? Check your potential with our usable equity calculator to explore investment opportunities. You can also utilise our stamp duty calculator to estimate the additional expenses of purchasing an investment property or get in touch with us—our team can help!
Start Paying Off Your Mortgage Sooner
At Harmony Property, we help Australians build wealth through property investing. Our data-driven, research-backed approach will help you leverage your equity to invest in properties and redirect those earnings into paying off your mortgage early. We will work closely with you to create a plan that focuses on your long-term goals—and help you gain financial independence.
Our property investment experts can guide you through smart strategies for becoming mortgage-free sooner. Call us today for a FREE strategy session.