Common home loans: why and how to repay them quicker

Finding the ideal home loan and the best way to pay it off can seem insurmountable alone. But with the help of an experienced broker, it’s much easier finding terms that will suit you. Read on for our guide on why and how to repay your home loan quickly.

It’s easy to see why it can be intimidating picking the home loan that suits your situation when there’s so much choice! To help, here’s a rundown of the most common home loans:

Principal and interest loans
These are often standard, with borrowers making regular payments against the amount loaned, with interest charges, over a 25-30-year period.

Interest only loans
These require payments to cover the interest of the loan only. The actual amount you borrow will only reduce with extra payments.

Within these loan products, there can be a variety of different interest rates, including:

  • Variable interest – the rate can go up or down in line with cash value or lender terms.
  • Fixed interest – interest will remain unchanged over a fixed time (usually 2-5 years).
  • Split loan – this is a combination where part of your rate is variable, and part is fixed.


Once you have secured your home loan and purchased your dream property, it can be tempting to rest on your laurels and worry about repaying your debt later. The Australian Investments and Securities Commission shows this is a common mistake – repaying your loan as quickly as possible will often save you money in the long run.

The larger your loan, the more interest you’ll pay on the principal debt, and if you ignore or fail to keep up with your payment schedule, you’ll start to struggle.

How to repay your home loan quickly:

  • Find a cheaper interest rate – shop around to find an interest rate on a home loan that seems within your means to pay off as soon as possible.
  • Make larger or more regular repayments – this reduces the length of your debt. Be sure to check if any extra payments incur a transaction free.
  • Plan for speed – the key to good financial health is planning. If you don’t think you can afford the repayments, you should speak to a financial expert who can offer advice on the next steps.


For more information on loan repayments or home loans, speak to our experienced team of mortgage brokers today.