Variable	1 Year Fixed	2 Years Fixed	3 Years Fixed

Company	Product	Rate %	Go to Site
	Standard Variable	6.39
	SuperStar	6.47
	Premium Plus Pkg <$500k	6.49
	Budget Home Loan	6.52
	EasyStart	6.54

These variable rate home loans are ranked by interest rate on balance of $250,000.

Company	Product	Rate %	Go to Site
	Great Rate HL 1-12m fxd	6.69
	1 year Fixed	6.79
	1 Year Fixed	6.79
	Fixed ProPack1 1yr	6.79
	1 year Fixed n Easy	6.80

These 1 Year fixed rate home loans are ranked by interest rate on balance of $250,000.

Company	Product	Rate %	Go to Site
	2 Year Fixed	6.89
	2 year Fixed n Easy	6.95
	True 2 year Fixed	6.99
	Fixed ProPack1 2yr	6.99
	Great Rate HL 13-24m fxd	6.99

These 2 Years fixed rate home loans are ranked by interest rate on balance of $250,000.

Company	Product	Rate %	Go to Site
	3 year Fixed n Easy	6.97
	Classic 3 year Fixed	6.99
	Great Rate HL 25-36m fxd	6.99
	3 year Fixed	6.99
	Fixed ProPack1 3yr	6.99

These 3 Years fixed rate home loans are ranked by interest rate on balance of $250,000.

5 Stars Mortgages - Variable Rate

Company	Product	Rate %	Go to Site
	Standard Variable	6.39
	Premium Plus Pkg <$500k	6.49
	Budget Home Loan	6.52
	Home Sweet Home Ln$250k+	6.75

These loans have low rates and offer things like redraw facilities and the ability to make additional repayments

This is an information service. By browsing on the website and/or using our search tools, you are asking RateCity to provide you with information about home loans from multiple financial institutions. We will try to show you a range of products in response to your request for information. We are not a credit provider, and in giving you product information we are not making any suggestion or recommendation to you about a particular credit product. If you decide to apply for a home loan, you will deal directly with a financial institution, and not with RateCity.

Fast track your way to mortgage freedom

Want to learn the tricks to saving on your home loan? Chris Walker reveals how to save and how to be mortgage-free sooner.

December 1, 2009

‘Mortgage’ is a French word that loosely translates to ‘a pledge to pay until death’. But there are simple steps homeowners can take to cut short the life of their mortgage.

Paying off your home loan early doesn’t just free up valuable cash and provide the security of outright home ownership. It will also save you a bundle in interest.

On the average loan of $300,000 repaid over the full 25 years at 5.75 percent p.a., the total interest bill would be around $266,000, adding an extra 89 percent onto the property’s purchase price.

In the early years of a mortgage the vast majority of each regular repayment goes towards the interest charge. The best way to turn this situation around is to make additional repayments on the loan – preferably from day one.

Making extra payments can be challenging, particularly for first home buyers. But any additional payment goes towards reducing the principal thereby trimming the interest charged each month. This way more of your regular repayment comes off the outstanding balance.

Made consistently, even small repayments can make a tremendous difference over time. On the same $300,000 loan mentioned earlier, paying an extra $1 each day will save about $10,000 in long-term interest. Make it $2 per day to save over $19,000 on the loan cost. Or, pay an extra $50 each week off the loan to slash up to $56,000 off the final interest bill and become mortgage-free four years sooner.

Another interest-saving option is making more frequent payments, especially if interest is calculated daily. If your loan permits, aim to pay half your regular monthly loan repayment each fortnight. Over the course of a year this will see you make 26 repayments, equal to 13 regular monthly payments. It can be a reasonably effortless way to effectively make one extra month’s repayment each year.

Tipping any windfalls into your loan can also generate big savings. Using a single tax refund of $1,000 to make a lump sum payment on our $300,000 loan would cut almost $3,200 off the loan cost. Make it an annual habit to generate even bigger savings.

If you have doubts about this strategy, consider this. Our homes are tax-free assets, so paying off a mortgage charging interest of 5.75 percent equates to an annual after-tax return of up to 10.7 percent, depending on your personal tax rate. That sort of return is something most of us would find hard to match among high risk assets – let alone the family home, which generally involves almost no investment risk at all.

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